The importance of saving cannot be denied. It plays a key role in helping us deal with several known and unknown situations in the future. But is there a right age to start saving? The answer to this is that the earlier you start, the better it is.
It is not the quantum of savings that is important when you are young, it is the habit. So, every parent should inculcate in their children the habit of saving a small percentage of their money (whether from their pocket money or earnings) for use at a later stage. The motive could be to fulfil a goal or be able to meet an emergency expense or learn the nuances of financial planning.
Here are some reasons why youngsters should have a savings account:
The habit of saving helps in building a kitty of funds that can prove to be useful to fulfil one’s goals in the future. Having a clear purpose in their mind and knowing that it can be achieved by setting aside a portion encourages kids to save. Starting early is a good idea even if the amount saved is small. They need to be taught that having a good savings balance will give them a chance to fulfil their dreams. It could be buying a specific toy or game or a gift for their friend. Plus having their bank account will give them a good feeling of independence.
Saving a certain proportion of their income regularly brings financial discipline and prevents any kind of overspending. While they may initially find it difficult to keep aside some money, but soon it becomes a habit especially when they realise the benefits of opening a savings account.
Teach Them the Value of Money
Having a saving account, see it grow, and use it to buy things teaches youngsters about the role of financial resources and the concept of affordability, they also start realizing that things they own are a result of careful planning, choices and savings thereby making them more thoughtful in their spending choices.
Savings go a long way in meeting any unforeseen or emergency expenses. If one has a good bank balance, life becomes easier and he is in a better position to handle any kind of situation. Having saved a good amount of money can make children feel proud of the achievement and their power to buy something of their choice.
Explore New Opportunities
Saving can play an important role in helping you to explore new opportunities. If you know you have adequate funds to take you through the next few months or years, you can explore new opportunities or enjoy some activity without worrying about earning and meeting your regular expenses during that time.
Stepping Stone for Newer Avenues
Opening a savings account gives children access to the world of finance. And as they grow older, they can use their saving funds to make investments, earn greater returns and introduce them to the power of compounding. It could even lead them to the path of dreaming big and saving for a house or a property at a later stage.
Opening an online savings account is extremely easy and once the children realize that the benefits associated with it, they will love to save.