CORPUS CHRISTI, Texas — How many of you are teaching your children the importance of saving their money? The importance of opening a checking or savings account?
On today's Protecting your Money, Andy Liscano speaks with a vice president of the Texas Banking Association about the topic.
"If we can teach them how to save before they learn how to spend, and if we wait till they're in high school, where they're spending, without learning how the savings works, we've done them a disservice," said Mary Lange, vice president of the Texas Banking Association.
Lange encourages parents to help their children under 18 and as young as six to help them open a checking or savings account.
And they have choices.
A Custodial Account is property of the child, but managed by the parent, and once the child turns 18, they can convert the account into their own name.
There is also a Joint Account.
"The parent can supervise," Lange says. "They can put limits on activity if they want to restrict activity or money the child can withdraw."
These bank accounts cannot be opened by the minor child unless accompanied by a parent or guardian. The account can be opened online, but Lange strongly suggests going inside the bank.
Something else to consider is the money in the child's account; while it's probably not going to be a sizeable amount, is it taxable?
It can be, Lange says, but she also points out, "you know banks aren't paying a whole lot of interest right now. And in most cases the IRS doesn't even want to know about it."
In an effort to to further help children understand the financial system, Lange points out how state legislators are emphasizing it.
"Senate Bill 1063 which encourages high schools to offer a Personal Finance Management course."
She says more helpful information can be found on these sites: