Most children in today’s world earn pocket money, but very few of them actually save it. Let us get an insight about how to inculcate such a habit in the younger generation, and go on to explore the several benefits that a savings account brings along in the long run.
Saving for the rainy day
It’s a common trait in children to buy something that catches their eye; this is particularly common when they have pocket money. They see it, they like it, they want it so they buy it. It’s simple psychology.
Much older children, once in their teen years, should be taught the importance of saving their pocket money or the extra cash that they may receive on their birthday or other festivals.
Because saving up for a rainy day, sometime in the future is important. If all the money is spent within a few days or weeks of earning it, what would you do in the case of an emergency?
Hence, it is crucial to keep a little bit in the savings account always.
Help from Banks
Banking and other financial institutions today have opened special savings accounts suited particularly to the needs of the younger generation, therefore inculcating the habit of saving at an early age.
The process is easy, just to fill up a couple of forms and if the child is a minor, needs the permission and signature of the guardian and everything else is sorted out. In fact, this procedure is now available online in a majority of the banks in India, so you don’t even have to make a trip to the nearest bank. Convenience and ease of access from your home are some of the most lucrative benefits that you get with your savings account today.
How to Start Saving
Saving does not mean putting all your money into a savings account and none in your current account. It depends on the amount of money that you receive.
Most financial advisor’s advice putting away half or at least a minimum quarter of the amount of the total money in the savings account, while the remaining in the current account.
This way, your current account can be used for your everyday expenses and needs while the savings account balance grows steadily every month.
Peace of Mind
One of the major reasons for starting to save at a young age is to ward off fear. Fear that one day you will financially fail and not have a penny to spend. So obviously this fear is warded off thanks to the backup that you have in your savings account for situations like these.
The Bottom Line
Saving your money for the future, benefits you in the long run. In the off chance that you need extra capital to pay off a time-sensitive loan or mortgage can be used up from your savings account.
Hence, it is essential to inculcate the habit of saving in children so that they would grow up to be financially responsible citizens with due course of time.