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Making A Money Smart Kid

Here’s the thing you never think of when you become a parent…  Literally everything your child has to know to become a valuable part of society, is taught by you, the parent. Tying shoes, how to make toast, how to read, how to use the bathroom, how to feel something without blurting it out at an inappropriate time, how to feel something and not bottle it up… Being a parent is teaching and coaching 100% of the time.  You are always on the clock and on the record and if you miss something, they can really suffer.  I mean, no pressure or anything!

One thing that is commonly pushed to the back-burner while we are busy teaching them the importance of hand-washing, is the importance of money management.  I know personally it wasn’t ever a topic of discussion while I was growing up.  The father of one of my high school boyfriends told me about 401Ks and retirement savings when I started my first job.  I didn’t listen to him, but he tried.  I’ve muddled through every financial decision in my life, attempting to use the internet and intuition.

For that reason, I’m already talking to my 7 and 2 year old about money.  They both get money for birthdays and holidays and neither of them really have much of a concept of how to spend or save, so we are starting at the basics.  The first step was getting them a savings account at the credit union.  This sounds way more complicated than it is (trust me, I don’t do complicated with three kids).  At Alltru Credit Union, we offer the CUbby Kids saving account, which only requires the child’s birthday, full name and social security number to open. Some parents have it all together and have these things memorized.  I do not, but I still made it happen (you have to celebrate the wins people!).

The really great part of this account in particular is that it earns 5.01% APY in interest so I can EASILY explain to the 7 year old that if he puts his money in his special account, it is safe from his baby brothers AND it gets bigger the longer it sits in there.  So one day, when the time is right, he can buy more Pokémon cards than he could today.  He can understand that concept, especially when I show him the statements and the line item which shows how much the credit union paid him.

One thing that we’ve done this year is to begin to set savings goals.  So if he wants to buy something, we talk about how much it costs, how much he expects to make at his next birthday or holiday, how much he might earn in interest and how long it will be before he can afford the purchase.  It’s simple stuff he’s aiming to buy, but my hope is that it’s positioning his brain to consider patiently saving for bigger things down the road.

Parenting isn’t easy.  Every day is about making the little gains.  Adding money management to the list of things they need to know before we release them out into the world, could be the difference maker.  That and how it’s inappropriate to take off your pants when visitors are at the house.

Live long and prosper,

Laura Woods