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How to Teach Children and Teens about Money

Teaching your kids how to save from a young age could help set them up for lifelong financial success.
 
Two smiling kids

Learning healthy money habits as a child or teen will build the foundation for responsible financial decision-making in the future. If you have kids, consider these tips to help teach your young ones the importance of money management – especially saving.

 

Tip #1: Provide an Allowance

One of the best ways to teach proper money management is by giving your child an allowance. The occurrence and amount of the allowance matter less than the act of handing over money for the child to control and manage independently. Use the allowance to help instill in your child that when they put in the work, money is provided for their good work. Teaching money basics is simpler when the child has real money to learn from and interact with.

 

Tip #2: Encourage Children to Make Goals

A good way to teach children financial responsibility, particularly saving, is by making goal-setting habits. Make sure you allow them to spend a little so they can directly see the rewards from saving their money for a period of time. Make a savings goal chart and use stickers or drawings to visually demonstrate the amount of money saved each week. If your child wants to save up for a specific item like a new video game, toy, a bike, or maybe even money to spend on an upcoming family trip, consider adding a picture representing what he or she wants to purchase with the saved funds to serve as motivation. Being able to visually see their goal and their progress will encourage them to save more to reach their goals.

 

Tip #3: Open a Savings Account

Having their own independent account may encourage kids to save more money, and it will make them feel more responsible. Head to any of our Alltru Credit Union branches with your kid and open a CUbby account. In the CUbby Kids Club, children 12 and under have fun while learning how to save money through a reward-based savings club. A monthly trip to the credit union where your child personally deposits their new savings and receives a balance slip is a positive reinforcement that they are growing their account. Additionally, this repetition will help solidify the importance of stashing away money and spark a lifetime of financial smarts. Since a CUbby account is a real life account, it presents a great opportunity to explain and teach them how they can not only make deposits but also withdraws at the credit union and how they don’t just store your money, they also make you money as well. As an option for teens 13-17 years old, we encourage opening a StepOne Checking or Savings account and put your teen on the path to financial independence as they learn how to manage their first accounts.

Tip #4: Teach the Power of Patience

Even as adults sometimes we need to be reminded we must wait to buy the things that we want. As much of a struggle as this can be, we always want to lead by example and be a role model for our kids. Set an example and practice holding off on buying something by making a savings plan that you share with the family. Explain to your children why waiting a little longer for the things you want may help you save and stay within your financial means. Make sure and explain to them that saving money will help you have enough money when you want to purchase something. Plus, show them how keeping money in an account allows the credit union to pay them for having money in an account because of interest.

 

Tip #5: Encourage Giving

In addition to saving, you may want to teach your children the importance of giving to others. Suggest giving a certain amount of their allowance to a local, not for profit of their choice or to use for friends or family member gifts. Alltru Credit Union was built upon giving back to our community, and to this day our many employees volunteer their time to give back to local charities and non-profits. We encourage our members to mirror this and also give back to their community. Encouraging your children to save so they can experience the joy of gifting someone they love a gift for Christmas or birthdays, is a joy and a feeling that is in important to experience.


Teaching kids how to save money may seem like a tough task, but it’s important in order to become a financially responsible individual. By practicing these tips and instilling money skills in your children from an early age, you can make your child’s understanding of money fun and accessible. It’s an investment in knowledge, which truly pays the best interest ;).

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