Student Loans
Great Lakes Credit Union has everything you need to help manage your money and plan for the future.
How to Teach Kids Money Management Skills
Youth & MoneyApril 26, 2024
How to manage money successfully is one of the most important skills a young person can learn. Teaching kids and teens key money management skills can help them thrive when they achieve financial independence as adults.
Here are a few ways you can teach kids about money:
Open a Youth Savings and/or Checking Account
If your kids earn an allowance or work part-time, opening a youth savings account for them is a hands-on way to teach them money management skills. With an account of their own, your children can save for things they need and want, and watch their money grow as they earn dividends on their balance.
Some youth savings accounts also offer educational resources such as apps, videos, games, and other activities to make learning about finances fun. Children aged 12-18 can open youth accounts designed to help young adults achieve financial independence.
Educate about Budgeting and Saving
Working with your kids to set a budget for saving and spending their money can help them understand the importance of smart and sustainable money management. For example, encouraging them to set money aside to pay for the things they need (clothes, gas, phone bill, car insurance, etc.) before the things they want (video games, toys, concert tickets, sweets, etc.) can be an important money management lesson to learn before they enter the “real world.”
Teaching your children to save money for specific goals and for emergencies can help them understand how to prioritize their spending. These conversations and exercises teach kids to live within their means, and to not overspend – skills they’ll need when they’re on their own.
Explain the Importance of Credit
Building credit and using it responsibly are two key money management skills that can set young adults up for financial success later in life. Having a good credit score contributes to their ability to rent an apartment, qualify for a mortgage, get an auto loan, apply for credit cards, and more.
Credit is both a necessity and a responsibility – if credit cards aren’t used wisely and strategically, then you can easily harm your credit score, rack up fees and interest, and bury yourself in a mountain of debt.
As your kids get older and become more financially independent, consider teaching them how to build good credit and to use credit cards responsibly. Some guidelines to follow include paying your credit card balance on time and in full each month, not utilizing more than 30% of your available credit limit, and creating a monthly budget.
Teaching Kids Money Management Skills for Life
Setting your kids up for financial success while they’re young will pay big dividends in their future. It’s never too early – or too late – to teach your kids about how to manage their finances. By developing healthy money management skills, your children will feel confident knowing they’ve acquired smart habits for lifelong financial well-being.
If you’re interested in opening a youth savings account for your child, check out GLCU’s Money Mammals® accounts. These accounts are designed for kids from 0-11 years old, and include resources such as games, videos, books, apps, and more through the Saving Money Is Fun Kids Club™. At GLCU, your child can start earning dividends on savings accounts with just a $1 deposit.
We also offer Adolescent$™ accounts for youth aged 12-18. Adolescent$™ account holders also gain access to videos, blogs, and other content. Account holders who are 15 years and older can open their own checking accounts (with their parent or guardian’s permission) to learn about money management firsthand. Adolescent$™ account holders also have access to free digital banking services, as well as bill pay.
The information in this post is for educational and informational purposes only and does not constitute investment advice. You should consult a licensed financial advisor before investing in any financial product or service.