How to Save Money for Kids in NY
Wondering how to save money for kids in NY? Your local upstate credit union has great financial tools and resources to get you started and a unique rewards program to help build lifelong savings habits. Here’s how GHS Federal Credit Union can help you give your children a financial head start.
ALL ABOARD: HERE’S HOW TO SAVE MONEY FOR KIDS
Smart money choices start close to home. Good saving and spending habits are among the most important things you can teach your child as a parent. But apart from instructing basic financial literacy, there are several things you can do to give your children a head start on reaching their money goals.
We take a look at why starting early on to save and manage money effectively is so important to your child’s financial journey. We’ll lay out the many advantages of our youth savings accounts and consider some of the other ways a lasting relationship with a local credit union like GHS Federal Credit Union can help put your child on the right financial track.
START SMART, FINISH STRONG
Controlling your spending and setting money aside for the future may seem like obvious things to do, but it’s something many Americans find hard to achieve. In fact, a CNBC report found that close to 60% of Americans currently live paycheck to paycheck—meaning, with no savings at all.
Spending and savings habits are set early in life so teaching your children how to control their money is perhaps the single most valuable life skill you can give them. This is not just because making smart choices from day to day means more money in their pocket at the end of the month, but because putting that money away early gives it time to grow.
Time is the most valuable asset we have, and while your children might not have a lot of money right now, they are rich in time — and smart, consistent saving lets you turn time into actual money that your kids can use to live a better life.
That can mean valuable savings to help cover the cost of college. The Education Data Initiative found that the average student now borrows more than $30,000 to attain a bachelor’s degree. Helping your child to build savings now can help avoid or minimize student loan debt that can take years to pay off.
And, while it’s hard to imagine your children retiring, helping them prepare for that today is crucial. PwC found that as many as one in four Americans have no retirement savings. Putting even a small amount aside now will reap rich rewards as the years roll by.
Some retirement accounts even allow you to tap your savings tax-free to pay for things like college tuition.
WHERE CAN I SAVE MONEY FOR MY KIDS?
While budgeting and savings habits are important and can be taught, where you put the money you save is also important. Let’s take a look at popular youth savings options, and why choosing to start your savings journey at a local credit union like GHS FCU makes sense.
YOUTH SAVINGS ACCOUNTS
Many banks and credit unions now offer youth savings accounts designed to help your kids start off on the right foot financially. These are usually custodial accounts, which means you share ownership of the account, including access to the balance until your child is old enough to hold a bank account in their own name.
A youth savings account provides a great place for your child to store and manage his or her money while allowing it to grow by earning regular interest dividends. Many accounts also offer access to funds via mobile banking or a debit card. It’s a small start, but one with the capacity to grow with your child as they take control of their financial future.
A youth savings account can help your child to:
Start saving early
Learn how to budget and set savings goals
See how interest payments can make savings grow
Learn basic financial literacy
Build a lasting financial relationship with a bank or credit union
Choosing to start your child’s financial journey at a local credit union like GHS FCU can make a lot of sense. Unlike major commercial banks, you and your child will benefit from:
Friendly, personal service
Simple, easy-to-use products
Lower account opening deposits and minimum balances
A focus on financial literacy
Community connections and local knowledge
MONEY MARKET ACCOUNTS
A money market account offers a more structured approach to savings. Your child will earn more interest than in a regular savings account, but minimum deposits are often higher and there are restrictions on how often in a month you can withdraw your money.
Opening a money market account can teach discipline and money management skills, and some accounts offer tiered interest structures that mean your child will earn progressively more in dividends as they build their savings over time.
SHARE CERTIFICATES
If your child is ready to start saving towards a goal like a school trip to New York City or an e-bike, a share certificate can be a great way to earn more interest while learning about goal setting and the value of delayed gratification.
Share certificates require you to keep a minimum amount of cash in an account for a set period from a few months to a few years. Your money will earn significantly more interest than it will in your savings account, but you will not be able to access it until the term of your certificate is up. The longer the term, the more interest you will earn.
Share certificates offer great predictability. You’ll know exactly how much interest you’ll earn and when you’ll get it. Best of all, deposits in share certificates are insured by the federal government in the same way that checking, saving, and money market accounts are.
OTHER OPTIONS
When you’re ready to start putting money towards your child’s long-term goals like going to college or, eventually, retiring, it’s a good time to sit down with a financial advisor at your credit union or bank to determine the best product for you.
College saving plans and individual retirement accounts (IRAs) are designed to grow money over time and offer major tax benefits and other perks, but also come with restrictions about how and when the money can be spent.
That said, some retirement products like Roth IRAs, allow you to pay tax on your savings now so it can grow tax-free into the future, while also allowing access to your money without penalty if you choose to use it for certain education expenses. This can make these products good choices for building savings while keeping your options open.
HELP YOUR CHILD BECOME A LIFELONG SAVER
At GHS Federal Credit Union, we recognize how valuable it is to start saving early, but we also know how important it is to help our members learn how to manage money responsibly. All our youth products are designed to encourage consistent saving and healthy money habits while rewarding hard work at school and contributions to the community.
GHS YOUTH SAVINGS ACCOUNT
Our Youth Savings Account offers generous perks to our youngest customers for building their savings and improving their financial literacy.
Your child can earn up to $100 in cash rewards a year, with $10 being paid directly into their GHS Youth Savings Account for every 10 rewards points earned. Your child can earn rewards points by:
Volunteering in the community
Making charitable contributions of any kind
Earning an A on a quarterly report card or improving their grades over time
Completing a financial literacy worksheet or attending a workshop
We’ll even reward your child for every deposit into their account, for having a paycheck deposited directly to the account, for opening a Junior Term Share Account—or even simply for having a birthday!
JUNIOR TERM SHARE ACCOUNTS
If your child is ready to start saving for a goal, our Junior Term Share Accounts allow them to access the higher dividends of GHS’s term share certificates with a lower minimum balance. They’ll gain the satisfaction of reaching a financial goal while seeing interest payments in action. And their money is invested completely risk-free with full NCUA deposit insurance.
LET GHS FCU HELP YOU START YOUR CHILD’S FINANCIAL JOURNEY ON THE RIGHT FOOT
As a local credit union with deep roots in central New York state, GHS FCU is the perfect place to start your child’s savings journey. Whichever of our youth savings products you choose, you’ll be setting your child on the right road to reach their financial goals with a financial partner who is ready to go the distance.
Click here to learn more about our youth savings account, or click below to find out more about our flexible, innovative share certificate products.