4 financial accounts kids need by 12th grade

by. Anisha Sekar

Teaching your children money management is a careful balancing act. You need to give them the tools to learn budgeting, saving and the simple mechanics of using plastic. On the other hand, you don’t want them to incur steep fees or tank their credit score.

Here’s a game plan that will prepare your child for financial adulthood, marked by the four accounts everyone should have before they graduate high school.

Age 5 (or younger): Savings Account

A savings account is the safest product you’ll open for your child: The money will grow, and it’s unlikely your little one will incur any fees. You’ll have to open the account in your kid’s name, but most banks will waive monthly service charges until he turns 18. Keep an eye out for banks and credit unions that offer junior savings programs and other incentives.

This is the modern version of a piggy bank, and a great teachable moment: You can convey to your child that banks are safer than storing cash under the bed, and they’ll actually pay him to keep his money there.

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