Start the conversation about different banking and investment tools at an early age to foster good financial habits.

Instilling good saving and spending habits in your children at an early age can help set them up for financial success in adulthood. Missy Epperson, Senior Vice President and Area Wealth Executive at Regions Private Wealth Management in Baton Rouge, Louisiana, provides insight on when parents should introduce their children to savings accounts, checking accounts, credit cards, and retirement accounts.

• Savings Accounts: Savings accounts can provide value to children as soon as they begin receiving money as a present. When your children get cash for their birthday or another special occasion, encourage them to earmark the money. For example, deposit 10 percent into a savings account, give 10 percent to charity, and set aside the remaining 80 percent for short- and long-term goals.
• Checking Accounts/Debit Cards: Introduce children to checking accounts/debit cards once they are old enough to drive. If an emergency arises while they are on the road, a debit card becomes handy. For example, if they realize they are running low on gas, they can use their card to put $10 in gas in the vehicle, which should be enough to get home. You can monitor your child’s account and open an account that allows you to set up and receive electronic notifications when it goes below a certain amount. But be sure that your child understands that he should be monitoring the account too to ensure that he isn’t spending more than what is available and incurring overdraft or other fees.
• Credit Cards: Credit cards can be beneficial for college students who are financially responsible and understand the repercussions of using these cards incorrectly. If your children have a credit card while they attend college, they can build their credit history and improve their chances of getting approved for an apartment or a loan once they graduate if they have established a good credit score. Financial institutions typically offer a small credit limit for new cards to college students, and if they are under 21, students will usually have to provide a cosigner or proof of income. Encourage your child to establish responsible payment habits by paying off the full amount each month.
• Retirement Accounts: Opening a Roth IRA for children can jump-start their retirement savings. As soon as your children start working, encourage them to put a portion of their earnings into this account. You can give them an extra incentive by offering to match their contributions. This will also give them an introduction to a financial advisor, overall investment strategies, and investment goal planning.

Learn more about student credit and savings accounts for children.