Think about opening a savings account for your child around his or her eighth or ninth birthday. Before then, most children don't understand what it means to put money in the bank. In fact, children may be reluctant to transfer their piggy bank savings to a savings account where, in their minds, it will never be seen again. And, of course, having their savings accessible gives them the opportunity to practice counting. Before transferring the contents of the piggy bank to a bank account, make sure the banks minimum deposit requirements and fee structure won't swallow up a child's hard earned savings.
Many banks offer special savings programs for children.
When it comes to investing, youngsters may have a bit harder time understanding the principles. Children usually don't show an interest before about age 12. Schools, too, can play a major role in a child's financial education. Some high schools, for instance, require students to take basic economics and finance courses to graduate. Other schools offer personal finance and money management seminars as electives.