April is Youth Financial Literacy month and there’s no better time than now to start teaching kids the importance of money and to provide them with information on how to properly manage it. Whether they are new to the concept of money or they understand what it means to have money, it’s up to us as parents, caregivers or educators to embed valuable financial habits into our kids. The earlier they learn some beneficial lessons on essential topics such as earning and spending, needs versus wants and saving, the more likely they are to continue developing these skills and making them more profound well into their adulthood.
One of the most basic concepts that children should know is that money is used for purchasing items. It is used to determine how valuable something is and having access to money allows you to have the liberty to purchase goods or services. Exposing children to different brands and pricing between the same goods and services is always a good learning lesson as well. Is it worth it to spend more on an item just because it’s a name brand or is buying the generic version of that same item just as good? These are questions that will aid children in understanding the value and cost of things. We also need to teach kids the difference between needs versus wants. The latest trends such as new shoes, video games and or electronics are all wants, and children should learn this at an early age. Remind your children that the food they eat and the home they live in are all things that require money, and that these are essentials and needs to everyday life.
Another important concept that children should know, especially younger ones, is that money is earned. It’s important to remind kids that money does not “grow on trees”. This is one important lesson that was ingrained in us from early on. Some ways you can teach your kids to earn money is by rewarding them for making good grades in school or for completing certain chores around the house. When money is worked for instead of just given to them, they learn to value and appreciate it so much more.
Lastly, we want to teach kids the most critical yet sometimes most difficult concept for us to grasp even as adults, and that’s learning to save. Most teens will begin working their first jobs as early as 16. While you want your kids to learn what financial independence means, you always want to remind them to make wise choices with their money. Teach them to save a portion of their check and to not spend on frivolous items. Having a sense of financial security is so imperative, especially in the times we are currently living in today. If they set a goal for themselves, such as saving for a new car or the latest tech gadget, they will be more motivated and even put more thought into what they spend their money on. The earlier children are exposed financial topics, the more comfortable and knowledgeable they’ll be at managing their money as adults.
Through our youth accounts you can help your child establish good savings habits. For example, with our Sandy Savers account, your child can be excited to save by being rewarded with cool prizes. When opening an account, members will receive a punch card and after 5 ($10) deposits, your child can pick a prize from our treasure chest. Once your child turns 13 they are able to open a free Student Checking account. With this, you can easily transfer your child’s allowance from your account to theirs and keep an eye on their spending. At 18, your son or daughter is automatically pre-approved for a GCEFCU credit card and can start working on building their credit score.
Overall, there are different ways to teach young children how to save, including apps on your phone, tablet, computer or even get creative at home and do a fun activity by pretending you are at the grocery store, or having them do small chores so they can start learning the value of money and saving. We believe that children are our future and becoming financially independent is essential to becoming a successful adult. Whichever you decide is best for your child, Gulf Coast Educators will always be here to help them get started.
Post contributors: Jessica Rodriguez, Rebeca Gonzales, Marissa Alvarez & Angeles Lopez (Business Development Team)
The opinions expressed on this page are for informational purposes only and is not intended to provide legal or financial advice. The views expressed are those of the author of the article and may not reflect the views of the credit union.