While children, teens, and young adults are heading back to school to continue their education, teaching good savings habits can be incorporated all year round. In fact, American Bankers Association is placing an increased focus on helping young people build savings habits and financial knowledge that prepare them for future financial success. Furthering the financial literacy of young people can be done beyond the walls of a bank. Friends, family members, teachers, and community organizations can all be valuable resources in empowering the next generation to develop strong savings habits and make informed financial decisions.

A Want Versus A Need

No matter the age, everyone is faced with decisions in life to spend money on a want or a need. For young people, spotting the difference can be more difficult.

American Bankers Association explains it this way: “Needs are something that you cannot live without, such as food, a home, shoes, and clothing. Wants are things that you’d like to have, but that you can live without.”

Having that foundational knowledge can lead children and teens to be better informed and less impulsive when making their decisions.

Sunny Day Spending

Which scenario sounds more appealing: the adage of “save for a rainy day,” or spend for a sunny day? Probably, the latter, but the two actually go hand-in-hand.

Teaching young consumers how to save for both scenarios gives them real-life decision-making skills.

There will be times when unexpected expenses arise — such as their headphones breaking or their phone screen cracking — when having money set aside in savings gives peace of mind that those can be fixed.

Alternatively, there are going to be occasions where using savings for fun — such as going to an amusement park with friends or getting an extra scoop of ice cream from their favorite parlor — can be enjoyed more easily thanks to saving for a sunny day.

Set Up For Success

Money might not grow on trees, but it can grow when it is put into a financial institution to earn interest.

Most banks have specially designed accounts for youth to kick-start their savings by receiving a higher annual percentage yield (APY) compared to the standard accounts. This boost in earnings can help encourage individuals to save through incentivizing their efforts.

Another positive aspect of depositing money into a savings account is that it cannot be lost or stolen, like if it was kept in a piggy bank or wallet. Young people can be reassured that by putting their money in a bank it is FDIC insured, so their money is protected. No more chances of siblings sneaking in and taking their hard-earned savings.

As financial education continues to evolve, helping young people understand the value of saving today can create opportunities for tomorrow. By encouraging consistent savings habits, setting achievable goals, and having open conversations about money, families and communities can help prepare the next generation for financial independence and long-term success.

About Newtown Savings Bank

Newtown Savings Bank is a community bank headquartered in Newtown, Connecticut, with over $1.8 billion in assets. The Bank has been deeply committed to its customers and the community since 1855. It has 15 branches located in Newtown, Bethel, Bridgeport, Brookfield, Danbury, Monroe, Oxford, Shelton, Southbury, Trumbull, and Woodbury, along with New Haven Regional Lending Center in Hamden. For more information and location details visit nsbonline.com or call 800-461-0672. Member FDIC. Equal Housing Lender.