Three Easy ways to Start Saving for your Children

It’s never too early to start discussing financial literacy with your children. Most children learn the bulk of their money management skills from their parents, and I still have vivid memories of my mom teaching me how to balance a checkbook while paying bills. Or, when I turned nine, my mom stopped letting me sit and wait at the bank because it was time for me to learn how to fill out deposit slips.

I didn't care to know any of it when I was younger. As an adult, I'm eternally grateful for the money lessons my mom taught me. I pledged to do the same when I had my daughter, but wasn't sure where to start. Nowadays, many financial institutions have programs geared towards children; it can be hard to decide which accounts fit your family's needs. Below I'm providing you with three types of accounts that I use, so you can start saving for your children.

As parents, we want to set our children up for financial success. I am a firm believer in saving while also being intentional with my financial decisions. I have made many financial mistakes like maxing out credit cards and, I hope to keep my daughter from making some of them by teaching her about money management at a young age. At age three, I ordered her one of those coin counter jars.

Any loose change she finds (mostly from mommy's handbags) goes right into her coin jar, including money from birthdays and holidays. At the end of the year, the money is deposited into one of her accounts.

Three Savings Accounts you can Start Today

Create a Children's Savings Account

Most banks and credit unions offer children's savings accounts, which parents can co-own. These accounts can help children develop the habit of saving, rather than spending, all their money. Most savings accounts allow parents to monitor their child's spending and set amount limits.

Open a Custodial Account

A custodial account is an investment account best for those who want to save money for their children but don't want them to have access to the cash until they are adults. You may also see custodial accounts described as UGMA/UTMA accounts, and this is based on the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act.

Leverage a 529 College Savings or Prepaid Tuition Plan

Financial experts seem to universally agree that a 529 plan is the best way to save money for child college costs. Each state has its own 529 College Saving Plan; check with your local government to see the plan's benefits and how to apply.

No matter what accounts you decide on, the most important thing is that you start. Your children will thank you for years to come.