How to Turn Your Child Into a Super Saver

April 30, 2024

Most parents aspire to raise children who will become responsible adults. Part of that journey to adulthood can be teaching kids to be financially responsible. According to a report in Forbes, in the United States today, 88% of US adults said they did not feel “fully prepared” upon leaving high school to make good financial decisions.

One of the best ways to help a child to become financially responsible is to open a savings account in their name. That has many benefits: it can teach a child how to save and manage money, learn the value of money, and build toward a financial goal, all of which can put them on the path to becoming a “super saver.” It also gives them an early window into how banks work and how money can grow.

When to open an account

It’s never too early to open an account for a child – even starting as soon as birth. In that case, the account would generally be a joint account, with a parent or guardian in control. That said, many opt to wait until their child is old enough to slip their coins into a piggy bank, perhaps their very first financial learning tool, or when they enter elementary school when they are old enough to read, write, and work with numbers. Whatever the age, there are some steps you’ll need to take to open an account for your young and future super saver.

Kara Stevens, also known as the “Frugal Feminista,” fondly recalls feeling empowered at the age of seven when she opened her first savings account. "Even though it was just pennies I deposited, it felt like a million dollars to me," she reminisced in a video. “It’s important to teach children the value of money early in life; that’s crucial for this set…You’re helping them build a strong foundation for financial success.”

How to Open an Account

At Ridgewood, we make it easy to open an account for your child. For anyone 17 or younger, you’ll need a Social Security number (SSN) – something you can obtain for your child at birth, or some other government-issued document and photo ID, then you will need to provide some personal information such as name, date of birth, and proof of address. You can open a Youth Savings Account at Ridgewood with just 25 cents; we will match your initial deposit up to $10. There are no monthly service fees and no minimum balance to maintain. You can choose between having a passbook or a monthly statement.

Managing the Account

Helping a child become a super saver can begin as simply as giving them a small allowance or even by setting up a little matching system to give them a dollar for every dollar they earn doing simple jobs either at home, for other family members or neighbors. Every time those dollars are deposited in the child’s savings account, they can see how money can grow and earn interest.

Once savings begin to accumulate, it’s a good idea to teach kids to set some savings goals. This helps them learn the value of and how to manage money. Limiting how much your child can withdraw from their savings account at one time can help them learn to prevent a big mistake later on. You can follow this by teaching them how to budget for those goals, then how to use educational tools such as Ridgewood’s free and online Ridgewood Financial Academy. It has several online teaching tools, which you’ll find valuable in this process.

Ultimately, one of the super saver goals might be saving for college, whether it is to help defray their personal expenses or pay tuition itself. With Ridgewood Savings Bank, you can set up automatic transfers from a checking to savings account, making saving effortless and ensuring you're consistently building your financial cushion. To help boost savings, Ridgewood's "Multiply the Change" program rounds up each purchase on the Ridgewood Debit Mastercard and transfers the difference from a checking to a savings account.

There are other programs as well. You might also consider opening a Roth IRA for your child as soon as they begin earning income. If still a minor, the account will require a parent or legal guardian. It’s also worth knowing that Ridgewood partners with College Ave® to simplify the process of obtaining a college loan.

The bottom line is that Ridgewood Savings Bank has helped generations of young New Yorkers become super savers. Helping children to save is important to us, and we’re here to make it as simple and informative as possible.

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