“We teach children to save their money. As an attempt to counteract thoughtless and selfish expenditure, that has value. But it is not positive; it does not lead the child into the safe and useful avenues of self-expression or self-expenditure. To teach a child to invest and use is better than to teach him to save.”

– HENRY FORD, My Life and Work

My son claims he was the victim of an in-house robbery. He is the kind of kid who carefully collects and saves each and every penny in his wallet, and counts it daily.

He had accumulated a healthy sum of money for a six-year-old; by carefully saving his chore money he had amassed $40 to buy a special Lego set. But one day, he went up to his room and was heartbroken to discover that he only had $10 in his wallet. 

It’s unclear whether there was an actual family robbery amongst siblings, or he just lost it among the chaos of Star Wars toys and Lego sets. My son will not soon forget that his hard-earned money has disappeared and he has to start his savings plan all over again.

In an effort to promote healthy money handling and teach the value of saving, my husband and I took our four kids, ages six to 10 years old, to the bank to open up their own checking accounts. We explained to them that the bank is a safe place to save their money.

Questions my kids asked about banking

As elementary-aged children, they had quite a few questions about handing their money over to a banking institution.

“Where does all the money go when you give it to the bank teller?”

“How does money come out of the ATM machine when you put a card in there?”

“How am I going to pay for things if I don’t have dollar bills?”

I realized that trying to explain banks and electronic money transferring to children was like trying to explain how messages get transmitted through the World Wide Web, or how electricity is conducted through power lines. Depositing money into a building is an esoteric idea for children to understand. 

The teller at the bank sat down with the kids and spoke directly to them about the process of banking. Each child signed their own names to documents required to have their own checking account. They were going to get ATM cards, and whispered secret passcodes into our ears. We took them to the banking vault to show them where everyone’s money was safely stowed.

The children began to understand there is a locked safe vault that is holding their dollar bills, and that they can deposit and withdraw money from this vault with the help of mom and dad.

The benefits of bank accounts

They each opened up an account in their own name. They then pinned in a 4-digit code (of their choosing) and signed their signature to the documents in order to receive their ATM debit cards.

My children have had their checking accounts for six months now, and it’s been a positive experience. When they receive an allowance or money for birthdays or holidays, we transfer it from our bank account into theirs. I let them watch me do the transfer to help them understand the process. When they get birthday cash, they immediately hand it over to me to deposit in their account.

No more dollar bills found loose on the ground for siblings to claim as their own, setting off a household battle. 

No more claiming they had twice the amount of money they now have in their wallet and then pointing fingers at their siblings in what could be considered all out slander. 

If my children want to buy a toy, I ask them if they’ve saved enough money in their account to purchase it. It helps them recognize how much items cost and the value of money. It even teaches them math!

My children are amassing so much money in their bank accounts that soon I may be asking them for a loan.

Having their own bank account helps your children learn concepts related to money and gives them practice to make wise money decisions in the future. Plus, there’s always the bank lollipops. Who doesn’t love a lollipop?

12 tips for opening your child’s bank account: 

  • Set an appointment with your local bank a few days in advance.
  • Set aside two hours of your family’s day to open bank accounts. It took my family an hour and a half to open four accounts. 
  • Have your child bring any money from his/her piggybank to deposit into the brand new account.
  • Bring proper identification for opening your child’s account. Ask what that is when you call for an appointment. We brought passports as identification. A birth certificate may be required.
  • Account should be opened in your child’s name.
  • Verify the minimum amount of money required to open an account. My bank, Bank of America, has a $10 minimum.
  • Make sure you are not being assessed a fee for your child’s bank account.
  • Keep an eye out that no minimum balance is required.
  • Have your child’s checking account linked to your accounts so you can easily transfer money between accounts.
  • Involve your child in the money deposits, transfers, and withdrawals so they understand how the process works.
  • Make a plan with your child about how the money will be used. Perhaps you and your child agree to spending half and saving half. 
  • Sit down with your kids each month with bank statements to go over what they’ve earned and what they’ve spent.