How to Teach Kids to be Money Savvy

In today's fast-paced digital world, understanding and managing money is a critical life skill that kids should start learning early. At UT Federal Credit Union, we're committed to helping families build a strong financial foundation. Here’s a guide to making your kids money savvy from a young age.

1. Start Early with Simple Concepts

Even young children can grasp basic money concepts. Start with understanding the value of coins and bills. You can make learning fun by playing simple money games or using play money in imaginative play.

2. Introduce an Allowance

Giving your children an allowance is a great way to teach them about managing their own money. Set clear guidelines on what the allowance covers and encourage them to save a portion of it. This practice helps them learn budgeting and delayed gratification.

3. Set Savings Goals

Help your children set achievable savings goals. Whether it’s for a new toy, a special outing, or a gadget, having a goal will motivate them to save. Use a piggy bank or a savings account to track their progress.

4. Teach the Difference Between Needs and Wants

Explain the difference between needs (things we must have to live, like food and shelter) and wants (things we would like to have, like toys and games). This understanding helps children prioritize their spending and make more thoughtful choices.

5. Introduce Banking Concepts

As your children grow, introduce them to basic banking concepts. Take them to the bank with you, show them how to use an ATM, and explain how credit and debit cards work. Opening a youth savings account at UT Federal Credit Union can be a practical step in this learning journey.

6. Encourage Entrepreneurial Activities

Encourage your kids to earn money through entrepreneurial activities like a lemonade stand, pet sitting, or lawn mowing. This teaches them the value of hard work and gives them firsthand experience in managing earnings.

7. Lead by Example

Children learn a lot by observing their parents. Be a positive financial role model by demonstrating good money habits, such as budgeting, saving, and making informed spending choices. Discuss your financial decisions with your children to provide context and understanding.

8. Discuss the Basics of Investing

For older children, introduce the basics of investing. Explain how stocks, bonds, and mutual funds work, and the concept of earning interest. This can be a fun and educational activity that also highlights the importance of long-term financial planning.

9. Reinforce Lessons Regularly

Consistency is key. Regularly discuss money topics and reinforce the lessons learned. Use everyday situations, like grocery shopping or planning a family vacation, to teach practical financial skills.

Partner with UT Federal Credit Union

At UT Federal Credit Union, we offer a variety of resources and accounts designed to help young savers. Our youth accounts come with educational tools and incentives to make saving fun and rewarding. Here are some of the youth accounts we offer:

• Kickstart Kids (Ages 0-3 years): Start a solid savings foundation early with our Kickstart Kids account. Enjoy a 1.00% APY* and receive a cute onesie or tiny t-shirt when you open an account. 
• Super Savers (Ages 4-12 years): Encourage savings with our Super Savers account. Earn Junior Owner Dollars for deposits, which can be exchanged for prizes, while earning 1.00% APY* on savings.
• Junior Owners (Ages 13-17 years): For teens approaching financial independence, our Junior Owners account helps manage their earnings from chores or part-time jobs. Earn 1.00% APY* and get a cool t-shirt upon opening an account.

**APY = Annual Percentage Yield. Shares insured up to $250,000 by the NCUA, an agency of the Federal Government. IRAs are insured for up to $250,000.

By instilling good money habits early, you set your children on a path to financial success. Let's work together to build a financially savvy future generation!