When you were a child, what did you do with your allowance money?
Did you spend it all at once? Or did you save it, hoping to buy something bigger and better?
The latter is what local banks and credit unions are hoping their younger customers will do as they learn about money management, and several offer incentives to help.
At Whatcom Educational Credit Union, children up to age 12 who open accounts are given two stackable coin banks – one blue and one white – that look like large Lego bricks. The 3-by-4-inch banks are transparent in the middle so kids can see their money adding up.
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The multiple colors are meant to help introduce budgeting, allowing children to use one bank for saving, and the other for spending or charity. Additional banks in yellow, red and green can be bought for $2.73. All youth accounts at WECU have $5 minimum balances.
At North Coast Credit Union, youth through age 17 receive $5 toward their existing checking or savings account for each school report card they bring in. Students should have at least a 3.0 GPA or show improvement against a previous report card to receive the $5.
Marilyn Brink, chief operating officer at North Coast, said report card payments have been running for about a decade and are quite popular among youth members, who make up about 10 percent of total membership.
“We’re seeing more and more parents bringing in their children in order to receive the financial education,” she said.
North Coast also offers a youth version of its “Build a CD” program, allowing minors to start their own certificate of deposit with a minimum initial deposit and balance of $25. Children can then add to the CDs with deposits of $25 or more on each successive deposit.
Youth accounts at North Coast can be opened with a minimum of $5 toward membership.
At Peoples Bank, savings accounts with no minimum balance or service charges are offered to anyone 18 or younger. The bank usually requires a $300 minimum balance and a monthly fee for its other savings accounts.
No-fee checking accounts with electronic-only statements also feature no service charges or minimum balance.
Tony Repanich, executive vice president and chief retail banking officer, said that as more payments take place electronically and on mobile devices, the bank wants younger customers to have access while still allowing parents to help their children manage their money.
“We want to make sure they’re making good financial choices early on,” he said.
Getting children to understand their savings accounts and becoming engaged in banking activity – including making deposits and reading over bank statements together to see how interest adds up – is helpful to build habits of financial literacy early on, he said.
Repanich said you can explain to children that, at some point, they’ll be able to buy something bigger because they put money aside.
“Whether that’s something superficial like the bigger Lego set – rather than getting the smaller Lego set because it’s all you can afford – saving up to get what you really want,” he said. “And I think most kids get that.”