Empower Kids to Make Smart Money Decisions

Learning how to manage money wisely is an important skill that can set children up for financial success in life. But it’s harder to explain the value of money in a society that is increasingly becoming cashless.

When children don’t see real money being exchanged, it’s harder for them to grasp the basic concepts around how it is earned and spent on things they need and want.

April is National Credit Union Youth Month and a perfect opportunity to talk with kids about money. In a CNBC Survey, 83 percent of U.S. parents said it is their responsibility to teach children about money; yet only 15 percent talk to their children weekly, and 31 percent never do.

Here are some tips to make money a regular topic of conversation in your home:

Start early and make it fun
Children love to role-play. Play simple games with preschoolers that involve pretend money and food, to help them understand the concept of making purchases. Use coins to teach counting, and involve them in making grocery lists, reading price labels, clipping digital coupons in grocery store apps, and making selections at the store. For older children, playing board games like Monopoly or the Game of Life teaches them to strategize and the importance of budgeting and saving for the future. There are also educational apps that teach older children how to save in a fun way—with games and rewards they can earn along the way. 

Take a look at how Practical Money Skills breaks down the basics of money management into specific age groups with familiar mediums like, video games, comics and apps.

Help kids set savings goals
Children may be more motivated to save when they have a specific goal. Talk with your kids about wants and needs and help them set age-appropriate goals. Then brainstorm ways to earn money for things they want. This could be doing chores at home or for family members, pet sitting, or getting a part-time job as a teenager.

Help them save at home
Use a clear jar to save money at home instead of a piggy bank. Once the coins reach the top of the jar, help kids count it to see their progress. As a reward, let them spend a little when they reach a milestone. Consider matching your child’s savings to help them reach the goal faster. That will keep them motivated and they are less likely to spend their money sooner. Don’t forget to celebrate when they reach the goal!

Make a budget
Use simple language to teach children how adults earn money and make spending decisions. Ask them to help write a budget for basic needs like mortgage or rent, food, car payments, and cell phones. Explain how your family handles any shortages each month and what your savings goal are such as a new car, vacation, and college. Include a savings line on the budget to help children get into the habit of saving each month. Don’t forget taxes! Children need to understand that we don’t keep everything we earn.

Open a savings account
Open a children’s savings account. U1's Young Savers account is for 12 and younger. Upon opening an account, children will get a coloring and coin book. Once the book is full, kids get a fun gift from U1 to encourage future savings or open a Teen Account for Kids 17 and younger (ideal for ages 13-17). Members 13 to 15 are eligible for a checking account, ATM or VISA Debit card; all these services must be joint with a parent. Members 16 and over may have a single checking account, ATM or VISA Debit card. There is no monthly service charge on Checking accounts 

Our Teen members also have the opportunity to open a holiday or “spring break” account. The “spring break” account operates like a vacation club account but is renamed “spring break” for our Teen members.

Gain Access to Money Smart Teens. This online lesson is designed and geared toward teens between the ages of 12-17. Questions on opening a checking account, building a credit history or budgeting goals – all of the answers can be found here. On top of that, you can practice setting short-term and long-term financial goals and then take a quiz at the end to test your knowledge. 

Talking about money can be as natural as deciding what to have for dinner, if you make it a regular practice. When children learn good money management skills, they have a solid foundation for achieving financial independence later in life.

Source: Ohio Credit Union League: https://ohiocreditunions.org/