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Foundation Banks on Parents Investing in Their Kids

By Wendell Hutson | April 12, 2013 6:27am
 Chicago Treasurer Stephanie Neely said that when dealing with money, parents should teach their children to save, spend, donate and invest in that order.
Chicago Treasurer Stephanie Neely said that when dealing with money, parents should teach their children to save, spend, donate and invest in that order.
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The Star-Ledger

ENGLEWOOD — Renee Bolden is planning a birthday party for her 8-year-old son next week - and she's hoping he doesn't get any checks as presents.

"I never really thought about opening a bank account for him because he is too young," said Bolden, a 39-year-old single mom in Englewood. Besides, "kids don't need an account until they are old enough to work and put some money into it."

It is that kind of mentality that pushed The Monroe Foundation to start an initiative and partner with local banks to encourage parents to open savings accounts for their children.

"We are hoping the parents also open an account because it starts with them," said Otis Monroe III, chief executive officer of The Monroe Foundation, a nonprofit located in west suburban Hillside. "It is important they realize that they need to start saving early for their child's future."

The foundation used data from the Federal Deposit Insurance Corporation to identify communities with the fewest bank account holders, and Englewood was among them.

"People use alternative financial services like currency exchanges because that is what they are used to doing and what is readily available in their communities," Monroe said. "Many banks do not market products toward households in disadvantaged communities like Englewood or the Austin community on the West Side."

"And as long as this continues there will always be a low number of black households with bank accounts," Monroe said.

Five banks including Marquette Bank, 6316 S. Western Ave., are participating in the program, and will allow parents to open a savings account for their children with a $5 minimum. The other four banks are PNC, Citibank, First Midwest, and Guarantee, according to Monroe.

And Monroe said his foundation would contribute an extra $5 to each kids' account, and Marquette Bank would contribute up to $25.

There is limit of four accounts per family, and to open an account parents must bring in two forms of valid identification, one of which must be a driver's license or state ID. The other ID can be a utility bill (excluding cell phone bills) or a benefits letter for parents receiving unemeployment or public assistance, such as disability or welfare.

A child's official birth certificate or Social Security card is also needed.

Monroe said 350 families have opened kids accounts so far, and the goal is to reach 1,000.

The kids' savings account drive runs until April 27, which is also the last day of Money Smart Week, an annual financial literacy initiative sponsored by the Federal Reserve Bank.

City Treasurer Stephanie Neely said she supports the foundation's efforts and said more financial literacy programs are needed for children.

"It's never too early to teach young people the basics of money management. By starting early you help create a savings habit that will last a lifetime, and you help them build a healthy relationship with money," said Neely.

"Our young people are bombarded with messages urging them to spend, spend, spend. They need common sense advice about making money, saving money and building wealth."

In the end though, Monroe said he knows every parent won't be inspired to start saving for their children's future.

"This initiative is for those who want to better their lives," Monroe said. "I know realistically we won't be able to help everybody but I am hoping we can help as many families as possible."