Raising Money-Savvy Kids
Struggling for economic prosperity is difficult for everyone. It's especially hard for young people who've never learned how to plan to achieve financial security.
What we need today, confirmed by poor financial literacy test scores from across the country, is leadership to help raise the awareness of financial issues for young people.
SCCU's objective is to help young people learn how to earn, spend, save and manage their own money.
The staff and members of SCCU are ideally positioned to respond because of our belief in the power of education-put to practical use-to improve the lives of their neighbors and their communities.
There are several things parents can do right now to help their children get on the right financial path. Here are some tips from the Credit Union National Association:
Younger than age 5
- Use coin savers to help children learn how to identify coins and count money.
- Introduce the concept of money by giving children small change to spend occasionally when you go to the store. Limit options to save time and reduce conflict.
Ages 5 to 10
- Give a weekly allowance to offer hands-on money management experience. Because children know they'll regularly get a set amount of money, this makes it easier to learn how to save.
- Let children save for, and buy, something they really want. Rewards reinforce young children's savings habits, so tie saving to spending.
- Use three containers labeled "Spend," "Save," and "Share." Suggest that children contribute a portion of their allowance and cash gifts to each to teach how to spend wisely, save regularly, and give to others.
- When the "save" container builds up, take children to the credit union to open a savings account.
- Provide children with opportunities to earn extra money by doing jobs not included in their regular responsibilities.
Ages 11 to 14
- Include children on shopping trips to teach them what things cost and smart shopping techniques. Let them help compare product qualities, prices, return policies, and warranties.
- Encourage odd jobs: babysitting, yard work, or pet care.
- Encourage children to use their own money to buy "beyond-the-basics" clothing and accessories.
Ages 15 to 18 and older
- Discuss saving plans for long-term goals, such as education and cars.
- Consider giving teens a seasonal clothing allowance beyond their regular allowance. After setting guidelines and limits, let them make their own choices.
- Consider helping financially responsible teens open a share draft/checking account.
- Consider encouraging financially responsible older teens to use a debit card with their share draft/checking accounts.
For more information about credit unions and money management, visit cuna.org.
Adapted from CUNA article at http://www.cuna.org/initiatives/youth/youth_press.html#article
The information on this page is for educational purposes only. SCCU is not engaged in providing estate planning or other advice. Please consult with a competent estate planning professional regarding any specific estate planning questions.