As parents, we recognize our duty to teach our children everything from motor skills, social skills and academic success skills. Why is it that we so frequently ignore something that our children will have to deal with every day in their adult life – how to manage finances! Most likely many of us have learned money lessons through the “School of Hard Knocks” or by trial and error, but surely, there is a better way. Experts agree, financial literacy skills are addressed much too late, if at all, in our school systems. Like most credit unions in Wisconsin we at DCCU believe it’s a continual process to teach children about money and it’s never too late to start a savings account for kids.
Here are some life stages to look for and tips on how to teach good lifetime habits.
1. When they become curious about money. A great opportunity to work WITH your child to teach money management is when they begin to show an interest in wanting things. Share price tags with them and compare costs so they begin to understand value. Open your kid’s savings account with your child present so they experience what it’s like and how to interact with credit union staff. Teach consistent saving, goal setting and smart spending with the money they receive from allowance or birthdays. The Great Dane Savers account at DCCU has lots of fun goodies to get kids interested in saving money.
2. When they get a job. Many employers now distribute payroll through direct deposit so your child will need an account. This is a great time to teach how money works in an abstract space, which is different from when they were younger and had cash and checks. Direct deposit, paychecks and debit cards may not feel like real money and the concept of value could get lost. Monitor the account together and discuss real life financial situations as well as needs vs. wants. Learning good money management skills now can be a benefit that will last a lifetime.
3. Before they start college. Help your child become comfortable with budgeting and resisting the urge to overspend. As your high schooler approaches graduation, they may feel overwhelmed with the upcoming transition to college. Make sure to involve them in all financial aspects of tuition, supplies and living expenses. College is a time of new independence and unfortunately, can also be the start of financial trouble for many young adults, which can take many, many, years to repair and reverse. This is also the time when most young adults get their first credit card – help your child choose and use wisely. Take time to discuss finances on a regular basis to keep small mistakes in check and everything on track.
When introducing your children to a credit union in Wisconsin look for one that places an emphasis on young depositors or folks who are new to banking. Credit unions are a good place to start because their main purpose for existence is helping members, of any means, achieve financial success through financial education and a variety of low cost or free services.