Earning, saving and spending money tips for kids

Your tween opens a birthday card and is thrilled to find a few dollars tucked inside from a relative. But what happens next? Are you talking with your children about how to save, share and spend the money mindfully?  

Many adults don’t think to have these conversations with their kids. Still, even a small amount of guidance in the younger years can prepare them to be adventuresome entrepreneurs, financially responsible adults and caring community members who donate to charitable organizations. 

Here are five ways you can encourage positive money habits with your kids. 

1. Let kids follow their passions, and pennies will follow 

Teaching children about financial literacy at a young age can help boost their earning potential and encourages financial responsibility as they grow up.  An essential part of teaching kids is making it a priority to invest in themselves and their skills, education and abilities so that they can earn money and then invest it wisely.

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 innate skills and can even translate into hobby money or even a future career path. 

2. Help kids open their own savings account 

Did you know Elevations Credit Union offers a First Tracks program where children under the age of 12 can open their own savings account (with a parent or guardian cosigner)? After their 13th birthday, they can add a checking account. 

Ivy learning about her new account.

Nine-year-old member Ivy C. opened her First Tracks account last summer 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.  

Her mother, Olivia, says 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. 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 is a teachable moment to show our tech-savvy kids how electronic payments and transfers between accounts — or future bills — will work when they become adults. 

For guardians considering bringing their children in to open an account, it’s good to know the credit union includes three pouches for your child to tuck their cash into until they come in to make a deposit. The colorful bags are labeled “Save,” “Share,” and “Spend” to help children understand money can be used in multiple ways. To be prepared for opening an account, parents will need to bring in the child’s social security card and have them think of a verbal password for their savings account — two more responsibilities to work on together! 

Scott Herrmann, a CFS* Wealth Management Advisor at Elevations, agrees that saving is a key skill for children to learn early on. “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. 

3. Sign kids up for educational 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) and Elevations Credit Union’s RealityCheck for Youth are both 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 work and making career and life decisions in fun, eye-opening scenarios that help prepare them for future decisions with real money. 

“One of my favorite JA units is on budgeting,” Herrmann said. “Kids in middle or high school are given a family situation with a job, gross and net pay, and options to pay for housing, food, transportation, fun, etc. The only rule is they can’t spend more than they earn — and they might want to eat once in a while. Then, they have to make it work.” 

Michelle Sulek speaking with students at the Elevations Credit Union kiosk in the JA Finance Finance Park.

RealityCheck for Youth was created by Elevations Credit Union in 2013, and today Elevations is rated as a top credit union in Colorado for reaching students in classrooms with financial literacy presentations, as ranked by Junior Achievement Rocky Mountain.  

Sheli Emerick, a Registered Associate in Wealth Management Services at Elevations, explains that RealityCheck for Youth is a volunteer-based organization that connects with schools and other like-minded, nonprofit agencies to offer financial education for our youth.  

The curriculum covers everything from basic coin counting and identifying cash to setting up a budget, understanding how to save money, how loans and interest rates work, investing, entrepreneurship, and so much more. 

“It is important for children to learn the difference between wants and needs, the value over time of saving and the confidence of contributing early on,” Emerick added.  

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! Sulek says she did this with her children when they were younger by creating a point system using pennies to determine if they earned their weekly allowance. 

“I had a chore jar for my kids,” she said. “When they completed their four to five daily chores, I would have them put four to five pennies in the jar. At the end of the week, we would add them up. Then, they would earn money. We would take it to Elevations, and they would deposit it into their account and receive a reward from the amazing staff.” 

Sulek says real jobs (by way of age-appropriate chores) like these teach children where and how to earn money. And we all know kids like to ask for money to spend, so why not let them 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. When a child wants something, rather than telling them, ‘No, you can’t have that.’ Tell them, ‘Sure you can.’ Set boundaries if necessary, and let them decide. For example, I remember one day when my son (then in elementary school) wanted to buy a rather expensive LEGO set at Target …” 

Herrmann says the conversation and teachable moment went something like this: 

Child: Daddy, can I get this?  

Parent: Sure, you can. How much is it? 

Child: It’s $130.  

Parent: I see. How much do you have? 

Child: $30.  

Parent: Hmmm, how much more do you need? 

Child: $100.  

Parent: Alright, where can you get the additional money? 

As a guardian, you can offer to help with more of the cost or allow the child to troubleshoot how to get the remaining funds. They may ask if they can do extra chores to earn a higher allowance, take money out of their savings account or get a loan until they get their birthday money.  

Sometimes the child will find a way to buy the item, and other times they will choose a similar but less expensive option or decide it’s not something they want or need and forego the purchase altogether. These options become valuable lessons at a low cost to help prepare them for more significant decisions in life, like shopping for an auto loan or mortgage. 

6.  Have money 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 to buy something 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 gets 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. 

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 or RealityCheck for Youth will be part of the curriculum during the school year. It’s never too early to educate our children — and ourselves — about managing money.  

Here’s a list of upcoming events and seminars hosted by the Elevations team that may be helpful for you. 

*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. 

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*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.

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