Financial Literacy for Kids
By GreenPathFinancial Wellness
Practical money management skills learned at an early age can have a lasting impact on the rest of your child’s life. Read this educational article to and help your child learn to save for a brighter future.
Prepare Your Children for a Life of Financial Success
We understand that saving for a child's education can be a challenge, especially when trying to balance it with your normal day-to-day expenses and long-term goals like retirement. There’s more than one way to set money aside for your child’s education. Different Methods provide different benefits. The choice you make depends upon what works best for you now.
Young Savers Account
The financial lessons children are taught during their formative years, even on the most basic levels, greatly influence the decisions they make once they start earning and handling their own money. Start your child on the right track by opening a Young Savers Account.
With a Young Savers account, a child can start learning about how a savings account can help them earn money through dividends. They will also have the opportunity to make deposits to their account and withdrawals.
Benefits of Young Savers
- Start building your child’ savings with as little as $5
- No monthly service fees
- No minimum account balance fees
- Available for children under 18 years old who qualify for membership
- Dividends are compounded and paid monthly
Coverdell Education Savings Account (CESA)
The Coverdell Education Savings Account was created to help parents pay for a child's education at any level — from kindergarten through high school and beyond.
The Coverdell Education Savings Accounts (CESA) historically has been restricted to an annual contribution limit of $2,000. You do not get a tax deduction when you put the money into the account, but the tax-free earnings potential is tremendous, and the withdrawals are tax-free, too — as long as they are used for education. Consult a tax advisor for details.
Take a look at the earnings potential: If you contribute the maximum for a newborn child every year until the child is 18, and you earn an average investment rate of 6%, the account will grow to about $70,000.
How it Works
- Anyone under age 30 can be the beneficiary of a Coverdell
- You may be eligible for a full contribution ($2,000), a reduced contribution or no contribution at all, depending on your modified adjusted gross income (MAGI) for the year
- Anyone can contribute to the CESA for your child, such as a grandparent or friend, up to a cap of $2,000 per year, per beneficiary
- If the original beneficiary does not go to college, the CESA can be transferred to any member of your family — though all beneficiaries must be under the age of 30
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What do more than 870,000 students across the nation have in common?
Since 2012, they have all completed the FBI’s Safe Online Surfing (SOS) Internet Challenge. Available through a free website at https://sos.fbi.gov, this initiative promotes cyber citizenship by teaching students in third through eighth grades how to recognize and respond to online dangers through a series of fun, interactive activities.