Kids know money doesn't grow on trees. But some of them believe it grows out of that machine in the wall.
They see their parents pull out an ATM card, punch in a code, and - voila! - dollars dispense. What they don't always know is that there is a limited amount of loot feeding the financial fountain, which makes it tough for them to swallow the word "no" from mom and dad.
And that, financial and consumer experts say, is why you should consider getting your children their own bank accounts.
"When your child says, 'I want,' it's time to start their money education," said Kathryn Kelly, associate director for the American Bankers Association's Education Foundation. "Occasionally, they'll want X, and you'll say, 'We can't afford it,' and they'll come back with the concept of 'Use that plastic card.'"
Teaching children about saving and spending helps them build better financial habits and become more informed consumers. And when kids use their own money, it just helps drive home the points.
You can open a savings account for your children at any bank, including yours, but a handful of area financial institutions offer child-friendly accounts worth checking out. They often come with higher interest rates, children-specific Web sites and giveaways, such as coloring books and chances to win gift cards, which financial experts say could help motivate your kids to get interested in responsible banking.
Sandy Spring Bank offers a children's savings club with no service fees and the chance to win U.S. savings bonds. And several credit unions across Maryland participate in the Looney Tunes Savings Club, a cartoon-character theme program designed to get children's attention and rewards them with small toys when they make at least a $10 deposit.
"Americans in general right now are doing a very poor job of saving," said Jack Gillis, a spokesman for the Consumer Federation of America. "That's due to a number of harsh economic factors, but also our extraordinary reliance on credit and the fact that the savings motivation simply isn't present in our daily lives. It's critically important for kids as part of their financial education to not only begin the habit of saving, but to understand savings accounts."
But Gillis cautioned that prizes should not be the sole stimulus for choosing an account.
"We've seen some so-called children or student accounts which pay little or no interest, which not only makes no economic sense, it takes away the prime motivation for saving," Gillis said. "Just like your parents don't want to be talked into a poor account to get a free toaster, kids shouldn't be talked into a poor account because of a coloring book or doll."
Susquehanna Bank, which has 63 locations in Maryland, launched child and teen accounts at its branches this year after acquiring another bank that offered the programs.
Its MegaBuck$ Kids Club account, which has about 3,000 subscribers in the state, lets children 12 and younger compete for quarterly prizes, and they get a T-shirt when they open the account. And the 200 Maryland teenagers who have signed up for accounts get an iPod or speaker system.
But the accounts also offer double the annual percentage yield - 0.5 percent - of the basic adult versions.
"This product is not really a moneymaker for the bank," said Kris Goode, who manages Susquehanna's MegaBuck$ program. "But it's something that we feel entices children to save for their futures. [The idea] is to educate them and make them good bankers, or good customers down the road."
And it can't hurt if it also brings in their parents, Gillis said.
"[Accounts for kids are] a great opportunity to one, teach the importance of savings and two, teach the importance of shopping around for financial services," he added. "It's a skill that kids need that's as important as any of the other educational components of their schooling but often not part of their schools."
This is a good month to begin the process if you haven't already, bank officials said.
National Teach Children to Save Day is April 29, and many banks have kids programs throughout April. It is also Financial Literacy Month at Baltimore's Port Discovery Children's Museum (www.portdiscovery. org), which is offering a "Make $ense out of Money" program Saturday in conjunction with the Federal Reserve and banks, including Susquehanna.