Financial Literacy

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Raising Financially Savvy Kids

April is National Financial Literacy Month, so there’s no better time to boost your child’s financial know-how. Whether your child is starting kindergarten or heading to college, you can support their success by teaching them the skills they’ll need to budget, save, and spend responsibly. With your guidance and the right financial tools, they’ll be in a great position to enjoy more opportunities as adults—and worry less about money.

Here are some tried and true ways to support financial literacy for children.

Begin with the Basics (up to Age 4)
Teaching kids finance doesn’t have to wait until they’re older. Learning about counting, adding and subtracting, and the concept of value can provide a great foundation for the financial concepts your child will learn later.

Running errands with your 3- or 4-year-old provides the perfect opportunity for fun teachable moments. For example, when you’re at the supermarket, give your child a few dollars to hold and ask them to choose between one product and another (lesson: you can’t buy everything).

Once your child is old enough to handle small objects, give them a piggy bank or clear jar so they can start saving coins. As they watch their savings grow, compare different denominations of coins and explain how certain ones are worth more. You can drive this point home by playing “store” and using either their coins or play money to conduct imaginary transactions.

Bring your child along to your local credit union branch. Explain, in the most basic terms, what banking is, and why it’s important to have a place to keep your money safe. These branch visits will be especially exciting once your child has their own youth savings account and starts depositing their birthday checks or allowance.

Bring Money Skills to Family Life (Ages 5 – 12)
Give your child the opportunity to earn an allowance for doing chores around the house. These simple tasks will teach one of their most important life lessons—that money must be earned—and discover that hard work literally pays off.

Now is the time to learn about saving and budgeting. Here’s an idea: give your child a set of three clear jars and label each one for a different purpose: spending, saving, and giving. Help your child divide their allowance into the three containers. Make sure they’re setting aside money for saving (for a larger future purchase, like a bike) and giving (money they’ll spend on their sibling’s birthday present or give to charity).

Point out how their Spend jar rarely fills up, while the contents of the Save jar continue to grow. While the concept of spending will come naturally, they’ll need help developing the discipline to save and give. But the pride they’ll get from buying something they saved for, or giving to someone else, will be well worth the effort. Your child is starting to learn that the way they manage money, and what they save for, reflects their personal values.

Now, and throughout their teens, one of the most important ways to cultivate good financial skills is by leading through example. If your child sees you depending too heavily on your credit card or overspending, they’ll likely pick up the same habits. On the other hand, if they see you following a budget, setting money aside for the future, and making economical decisions (like cooking instead of taking the family out to dinner), they’ll be more likely to adopt these values.

Start talking with your child about family financial decisions and their potential outcomes so they understand that financial choices are an important part of life and being an adult.

Increase Responsibility (Ages 13 – 15)
Now it’s time to reinforce the lessons you taught in early childhood. Make your teen responsible for some of their own expenses, like going to the movies or a monthly music subscription. If they don’t budget for these expenses, they don’t get to enjoy them.

Encourage them to take on paying gigs outside the home like babysitting, dog walking, or doing odd jobs for your neighbors, and make sure they’re saving much of what they earn. Have them review their savings account statements to track their progress in saving.

Launch Your Money-wise Adult (Ages 16 and Up)
When it comes to teaching teens about money, there’s no better learning opportunity than their first part-time job, whether it’s at a fast food restaurant or the local grocery store. Go over their first paystub and talk to them about payroll deductions and income taxes (lesson: taxes are a thing).

Their teenage years are the perfect time to adopt a simple savings program like the 52-Week Savings Challenge, in which savers set aside one additional dollar each week for a whole year. After 52 weeks, your child will have a whopping $1,378 set aside—and will observe firsthand why it’s so important to save.

Once your child is 18, a whole new world of financial opportunities opens up, from their first checking account to credit cards. Help your child open a student account or checking account that makes it easy to avoid the monthly fee. Make sure they understand their responsibilities as an accountholder, from safeguarding their debit card to checking the account balance often to avoid overdrafts. Also, have a talk about credit cards, the importance of building credit, and what it takes to use a credit card successfully and responsibly. Help them find a savings-secured credit card with a low rate and no annual fee (like ours here at USE Credit Union).

Whether your child’s next step is college or the start of a career, their years of hands-on experience and guidance will give them a strong foundation of financial knowledge, and a great start to their financial journey!

Supporting a Lifetime of Financial Literacy
April is not just Financial Literacy Month. It’s also Credit Union Youth Month, a celebration of credit unions’ commitment to supporting financial success at every stage of life.

USE Credit Union is here to help kids save money, and we offer all the financial products and services your child will need, backed by a friendly team that’s here to answer any questions you or your child may have along the way.