Man and woman watch child add coins to piggy bank

Even before they’ve hit their teen years, kids are thinking about money. Specifically, young kids are thinking about how to spend money on the latest apps, games and everything on store shelves. So, teaching your children simple money lessons that will last a lifetime is key. Here’s how you can help young children learn and grow with smart money habits.

Show children the value of saving

Give your children a piggy bank for saving allowance and gift money. Help your children determine short- and long-term savings goals. What if your children are saving for something big like the latest video game console or the newest toy on the market? That’s when you explain how long it will take to save for that item as well as showing how much will be taken out of the piggy bank to make the purchase. Explain to your youth how buying this item now will negatively impact buying another item later. Seeing the money disappear might make your children think twice about the purchase.

Money Lesson: Your children learn how to make tough choices about where and when to spend money.

Visit the Credit Union

Traditionally, jars have been a great way to teach youth about budgeting. Your child can add a little money to each jar and specify a jar for different savings priorities like buying toys or giving to charities. You have the added benefit of your Credit Union to help with lessons on good money habits. Visit a branch and help your child open or contribute to a youth savings account, designed for kids aged 12 and younger. Don’t forget to show your child the monthly statement when it arrives in the mail or becomes available online.

Money lesson: Your child discovers how to track and manage money.

Let your child try (and fail, if necessary)

We often remind children what big boys or girls they are. So why not let them experience what it’s like to buy on a budget like big kids do? Determine how much your child will need to save from allowance or birthday money, and for how long, to meet the stated goal. When the time comes, if there is not enough money saved, don’t bail your child out! Revise the plan to focus on continuing to save.

Money Lesson: Together you and your child can develop a savings plan focused on purchases important to your youth.

Be a positive money role model

It’s one thing to tell your kids about the importance of being money-wise. Showing your children you follow the same rules will leave a better impression. Let your children help make the grocery list for the week by planning meals and snacks. Once at the store, teach your children how to comparison shop. Discuss why you’re buying the $2.50 pack of cookies over the $4 pack. Explain that now you have enough money for ice cream since you’ve spent less on one purchase.

Money Lesson: Show children how to live within their means.

Create a money contract

Create a money agreement between you and your child. This makes your child accountable for repaying money borrowed or for sharing of costs. You can even customize it with kid-friendly language and stickers, or drawings related to money. Download LGFCU’s Child and Parent Financial Contract you can use with your older youth. Post your contract in a visible place like on the refrigerator to remind everyone of the commitments made under the agreement.

Money Lesson: Written agreements document and promote accountability.

Use these tips to lay the foundation for a future of good money management. Start kids out early with valuable money lessons they can always use.


The advice provided is for informational purposes only.

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