Raising Financially Literate Children

Read on our Knowledge Hub.

April is Credit Union Youth Month! We’re matching the first $5 in deposits for youth accounts^* and hosting free, no sales-pitch online financial education classes! Get started at hzcu.org/youth.

You play a prominent role in your kids’ financial journey. Talking to your family about finances and teaching your kids how to save and spend responsibly will set them up for success as they grow! Here are some critical financial concepts your kids should learn, categorized by age:

Ages 2 and 3 – Identify Money

While they might not quite understand its value at this age, you can use spare change to teach your child how to identify money. Have them trace different coins and color in the shapes, then match the images to each coin. Teach them the names of each coin and their worth.(But be careful, they may try to put coins in their mouth!)

Ages 4 to 8 – Spend, Save and Earn Money

Shopping is a great opportunity to teach your children the value of money. Give your children a “treat budget” – an amount of money for them to use as they’d like. It’s their choice if they want to spend it on toys and candy first thing, use it throughout the day or even save it for another day. But if they go over budget, stick with the plan and don’t give them any more cash.

Additionally, providing an allowance is a great way to teach your kids financial responsibility. Doing chores like cleaning their room or taking out the trash will help your children learn the importance of good work ethic.

Once your children start earning money, you can teach them how to save. Consider introducing your child to the “Spend, Save or Share” strategy. Explain the difference between a “want” and a “need”, then help them list short-term goals. Set up three containers to store their money in – either to spend, save or donate. Getting into the practice of categorizing their spending will help them build healthy spending and saving habits.

You can jumpstart your children’s route to savings success by equipping them with their own youth checking and saving account! During Credit Union Youth Month, we’re helping your children flourish by matching the first $5 in deposits and offering limited-time youth CD specials!^* To get started visit hzcu.org/youth.

Ages 9 to 12 – Long-Term Savings Goals

After your children learn the importance of saving, encourage them to start making regular deposits in their savings account. Explain to them how interest works and how it’ll help them reach their goals. This also allows them to enjoy the satisfaction of watching their account grow.

Another important topic to discuss with your child is long-term financial goals such as saving for college, a down payment on a car or even retirement. You can explain the importance of setting aside money regularly to reach these goals, even if it means making short-term sacrifices.

Ages 12 to 16 – Credit, Debt and Budgeting

As your child enters their teen years, you can start discussing more hypothetical financial concepts such as credit and debt. Help your child understand how to use credit responsibly and explain to your children how a good credit score can benefit them. Also explain the difference between good and bad debt and how they impact their credit score.

By understanding how to manage money and stick to a budget, teens can avoid overspending, save for important goals and avoid falling into debt. With our youth checking accounts, we help your children budget better with access to our free online money management tools! There they can easily visualize where their money is going and set savings goals for themselves.

Ages 16 and Up – Investing, Taxes and Insurance

As your child grows older, you can start discussing even more advanced concepts with them, such as investing, taxes and insurance. Explain how stocks and bonds work, why money is taken out of their paycheck for taxes, why they file a tax return and why it’s important to protect their assets.

By discussing real-world financial concepts with your child, you can prepare them for success as they venture off on their own!

* Deposit match applies to first $5 only for youth accounts (ages 0–18) opened during the month of April 2023. Offer expires 4/30/23.