Should children have bank accounts?

In Latest, Money cents by Donna Willan

Should children have bank accounts?

I still remember my first bank account; I was about six years old and my brother was eight. We went into our local Nedbank branch and opened an account. We felt so grown up AND we got a really great bank account activity book – every time we deposited money we did another activity in this book (which I happen to still have. I am a hoarder!)

To me, it makes absolute sense that children should have bank accounts. “Why?” you might ask. Firstly, I think it has been really important in helping me become financially wise (assuming that I am a bit wise at least). Secondly, it’s part of developing a sense of responsibility and independence as we grow up. All good things, surely?

Two years ago, my kids and I were in the bank and an older friend was opening his first bank account and they were intrigued by the idea. So this year when they got money for their birthdays they both immediately took half and opened bank accounts. They have their own bank cards and their own secret pins – they are thrilled (sadly, no more fun activity books though).

But I have been challenged by a few friends who have said that I should not have encouraged my children to open bank accounts. One friend argued that kids get almost no interest on money in their bank accounts. This is, in fact, the wrong lesson; they should refuse to engage with the banking system because it is exploiting them. Others, perhaps less radical, explain more gently that children shouldn’t have to worry about money and banks.

I have thought about both of these critiques, but do you know what? I don’t agree; I think that having a bank account is exciting and helps develop financial savvy – and it’s never too young to start that. We live in a capitalist system, let’s help our children navigate it wisely!

In my next column I am going to return to a topic I explored last year and see how I am doing: My prospects for retirement and will I ever retire?

Donna


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