BMO Harris Bank is marking national Money Smart Week (April 5-12) and Teach Children to Save Day (April 11) with a new report that revealed a majority of parents in Minnesota with young children (74 percent) have, or are planning to open a bank account for their child, on par with the national average. Nearly half (49 percent) are planning to do so before their child turns five. However, the study also found quarter (26 percent) will not open an account, the same as the national average.
The survey, which polled parents with children under ten and those who are planning to have their first child in the next five years, also found in Minnesota:
One in 10 parents have opened or plan to open an account when their child is between the ages of 5 and 9
Six percent have opened or plan to open an account when their child is 10 and 12
Nearly a tenth (9 percent) will open an account when their child is between 13 and 17
"It's encouraging that so many parents in Minnesota are opening an account for their children," said Todd Senger, Minnesota Regional President, BMO Harris Bank. "Saving early for your child's future can make a major difference in providing for their financial needs. It also sets a good example for your children to help them learn about the importance of savings."
The study was released to coincide with two important financial literacy events, Money Smart Week and Teach Children to Save Day.
Money Smart Week, an annual event originated in 2002 by the Federal Reserve Bank of Chicago, aims to increase awareness about personal finance among consumers. Through partner organizations, the event has grown in reach and scope and is now recognized across the U.S. Teach Your Children to Save Day was established by the American Bankers Association in 1997, providing students with lessons on the importance of saving.
This year's Money Smart Week will be held April 5 to 12, and hundreds of adults and children in communities served by BMO Harris will take part in activities ranging from money management seminars to the Money Smart Kid Essay Contest. There will also be 44 mortgage events nationwide, ranging in topics from "Understanding Your Credit" to "Steps to Homeownership."
BMO Harris offers the following tips for parents and children on how to start to be a smart saver and investor from an early age through later teenage years:
The Early Years: The Value of Saving
As soon as children start to collect a few coins and understand the value of money, open a savings account for them and explain how interest works.
Focus on a specific goal (such as buying a video game or a bike), which can make it easier for kids to set aside the money.
Suggest children save at least part of the cash they receive -- for birthdays, holidays or jobs -- for something they really want.
Taking Action: Learn the Marketplace
Talk about the concept of risk and the importance of having a balanced investment portfolio. Use language they understand and keep to key, simple concepts.
Explain that purchasing a stock means they own a small piece of a company and the value of the stock can go up or down.
Show them how to read stock prices online. If you have an online investing account, walk them through your portfolio and explain to them the rationale for your portfolio's composition and any trades/changes you make.
Getting Real: Becoming an Investor
Once the groundwork has been set, have kids invest a small sum of money in a few stocks they were previously tracking and perhaps offer to match any gains the child makes in their stock picks.
Teach kids about the different savings and investing instruments available to them, such as 504 Plans and money market accounts for longer-term purchases.
Survey results cited in this release are from a Pollara survey commissioned by BMO Harris Bank with an online sample of 1,500 Americans (including 150 from Minnesota) between November 22ndand 29th, 2013. This includes 993 interviews with parents of children under 10 and 507 interviews with Americans who expect to have their first child in the next 5 years. The margin of error for a probability sample of this size is ± 2.5 percent, 19 times out of 20.
About BMO Harris Bank BMO Harris Bank provides a broad range of personal banking products and solutions through more than 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Banking products and services are provided by BMO Harris Bank N.A. and are subject to bank or credit approval. BMO Harris Bank® is a trade name used by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and CDN $593 billion in assets (as of January 31, 2014).
