As early as age five kids are ready to start saving money and carrying small amounts of cash for supervised purchases, says Judy Arnall, a parenting expert and mom of five in Calgary. But eventually, kids need a place safer and bigger than a piggy bank to stash their cash (and yes, to get their own debit card). Here's how to help your kids manage money on their own.

Open an account
Kids can open a bank account at any age, says Su McVey, vice-president of customer communications and marketing at BMO Bank of Montreal. She recently helped her own kids, ages eight and 11, open accounts. "It was a big deal for them – they felt important and grown-up," she says.

While there is no hard-and-fast "right time" to open a savings account, generally kids are ready for a debit account by the age of 10, says Arnall, author of Discipline Without Distress (Sandhill, 2007). Signs they're ready to manage their account include asking how much money they have and requests for a debit card, says McVey.

Visit a bank branch together. Bring your ID if your child is under age 12. While you won't have to cosign for the account, the bank will need to have your info on file. "Your child will need two pieces of ID, such as a birth certificate, passport or SIN card," says McVey, and it's OK if it's not photo ID. You'll be asked to sit down with a banking rep to open a youth account, which typically has waived fees.

What they will get
Just like you, kids get online banking access and a bank card, including passwords and PIN numbers, provided they're old enough to sign or print their name. Mail from the financial institution will come addressed to them. Parents of kids under age 12 can set restrictions on the account, such as limiting the number of withdrawals.


Page 1 of 2 – Find real-life advice to help you teach your kids banking basics on page 2.
Teach the kids banking basics
Lessons on spending and saving, how to bank online, and how to use a debit card and ATM responsibly will go a long way in building the skills and confidence kids need to manage their own money. Not sure how to establish an age-appropriate budget? Check out the kid- and parent-friendly online resources offered by banks to help you figure it out together. (You don't have to be a customer to use these sites.)

The Bank of Montreal's SmartSteps is broken down by kids' age group, and parents can learn how to teach their kids about saving for special purchases, writing cheques, and how to be a careful consumer and wise investor. Another good resource is TD Bank's WOW!Zone, which provides kids, teens, parents and educators with their own channels.

Online banking resources
• CIBC's SmartStart for Kids offers child-friendly answers to money and banking questions and an outline of the different kid-oriented banking accounts on offer. There's a section for parents, too.

• The Scotiabank Hockey Club mixes a small dose of banking advice with a more generous measure of hockey news.

• RBC Royal Bank's Better Student Life teaches teens entering university how to budget for campus living. Discover how to stretch your dollar, get the right banking plan and sock away money for travelling.

This story was originally titled "Small Savings" in the October 2011 issue. Subscribe to Canadian Living today and never miss an issue!

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