6 Ways to help children learn money-savvy tips

Your child opens a birthday card and is thrilled to find a few dollars from a relative tucked inside. But what happens next? Are you talking with your children about how to save, share and spend their money?   
 
Here are six ways you can encourage positive money habits with your kids: 

1. Help kids learn to fund their goals and passions.  

Many adults don’t think to have these conversations with their kids. Still, even a small amount of guidance can prepare them to meet goals as adults, such as entrepreneurship, donating to community causes and becoming financially responsible adults.  

Encourage lemonade stands. Let your child sell a few outgrown clothes at your rummage sale. Be enthusiastic about a new crafting hobby — and selling it online. These passionate moments help your child hone their skills and earn hobby money or even become interested in a future career.  

2. Help kids open their own savings accounts. 

Scott Herrmann, a CFS* Wealth Management Advisor at Elevations, says saving is a key skill for children to learn.  

“Saving money is one of the best ways to empower your kids. If they have money, they have opportunities. If they can make their money grow, they have more opportunities,” he said.  

Nine-year-old member Ivy C. opened her First Tracks™ account**, an Elevations youth savings account for children 12 and under, at the Old Town Branch in Fort Collins. Her first deposit included tooth fairy money and the weekly allowance she earned by helping clean the floors at home.   

As part of the program, kids receive three colorful pouches they can use to keep cash before bringing it to deposit. The bags are labeled “Save,” “Share” and “Spend” to help children understand money can be used in multiple ways. 

Her mother, Olivia, said Ivy loved visiting the credit union and enjoyed saving her money to buy more plush animals.  

“Ivy earns $5 a week in allowance. I’ve been giving her cash every week, and she’s put the cash in several piggy banks in her room,” Olivia said. “Now that her money is in a savings account, we’ve agreed that I’ll electronically transfer money into her account every month.”  

This process can show our tech-savvy kids how electronic payments and transfers between accounts — or future bills — will work when they become adults.  

3. Sign kids up for financial education programs.  

It takes a village to raise our children, and financial literacy programs in our community can make all the difference for our youth. Junior Achievement-Rocky Mountain, Inc. (JA) is offered in most Front Range schools.  

Herrmann volunteers with JA in the Boulder Valley School District, where kids get hands-on experience with managing fictional careers and life decisions in fun, eye-opening scenarios.  

In one of his favorite units, kids learn to budget for a given family situation with a set job, salary, and options to pay for housing, food, transportation, fun, etc.  

“The only rule is they can’t spend more than they earn,” Herrmann said. “Then, they have to make it work.”  

4. Establish a points system for earning money.  

Your children probably already help with basic chores around the house. We know as adults this nurtures responsibility and good habits. Now, monetize it! One way is to create a monetary reward for doing chores, keep track on a chore chart, then take the money to the bank regularly.  

For each First Tracks™ youth savings account deposit over $5, children get a small prize to help motivate them to save. This teaches children the value of money and a means to earn it.  

5.  Let your child work through an actual purchasing decision.  

After your child has earned a few dollars of their own, taken a class and maybe even opened their first savings account, put them to the test. Herrmann suggests challenging your child to help with a large purchase they’ve been asking about, such as a bicycle or video game.  

“Kids are naturally creative,” he said. “It’s helpful to let them begin making financial decisions at a young age and experience the consequences.” For instance, Herrmann’s son once wanted to buy an expensive LEGO set at Target. Rather than say “No,” he said he could buy it, but asked how much it was and how much money he had. 

His son was $100 short, but again, rather than simply saying “No,” Herrmann opened a conversation about how his son could earn the funds.  

Sometimes a child will find a way to buy the item by saving or earning, and other times they will choose a similar but less expensive option or forego the purchase altogether. These options become valuable lessons to help prepare them for more significant decisions in life, like shopping for an auto loan or mortgage.  

6.  Have family finance discussions with your children.  

Talking about income and debt shouldn’t be considered taboo. Including children in household chats about saving for a vacation or an unexpected bill can help them learn even more about earning, saving and spending money, as well as the differences between wants and needs.  

Be sure your kids know there are fees when paying bills or loans late. You can practice this by loaning your child money and telling them they need to be responsible and pay you back when they receive their allowance. For each day the payment is late, a small late fee is added. Your child will realize the later they are with their payment, the more they will pay. Kids tend to learn quickly they don’t like parting with their hard-earned dollars.  

Help your child learn money management.

You’re not alone when it comes to teaching your children about responsible ways to earn, save and spend money. Next time you visit your favorite Elevations branch, ask the teller for more details about opening an account for your child. Or, contact your child’s teachers to see if Junior Achievement will be part of the curriculum during the school year.  

It’s never too early to educate our children — and ourselves — about managing money. Practicing visiting a bank and depositing money is a key learning experience. First Tracks™ Youth Savings is available to eligible members 12 and under for only a $1 deposit.** Talk to a branch representative or visit the First Tracks section of our savings account page to learn more. 

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC), and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk, including possible loss of principal. Investment Representatives are registered through CFS. Elevations Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.  

Financial Advisors are registered to conduct securities business and licensed to conduct insurance business in limited states. Response to, or contact with, residents of other states will be made only upon compliance with applicable licensing and registration requirements. The information on this website is for U.S. residents only and does not constitute an offer to sell, or a solicitation of an offer to purchase brokerage services to persons outside of the United States. 

**One-time $5 membership fee and eligibility required at account opening