It’s Financial Literacy and National Credit Union Youth Month, and what better way to celebrate than by bringing you some tips on how to teach your children financial responsibility in interesting and fun ways?
This year’s Credit Union Youth Month theme is Unleash the Power of Saving at Your Credit Union™. Learning to save is an extremely powerful tool for a child. Here’s some proof: Research conducted at the
University of Kansas shows that young people who had savings before they were 17 are more likely to maintain positive relationships with financial institutions, diversify their financial portfolios and accumulate more assets as they age. These young people who had savings accounts as children averaged about $2,000 in savings by the time they reached 23 years old, as opposed to $100 in savings for those who didn’t save early. Another well-established study, this one by the
Brown School at Washington University in St. Louis, found that children with a savings account in their name were six times more likely to attend college than those with no account.
Did you know that a child at any age can get started with
a youth savings account for as little as $5? For the best “bang for your buck,” look for a youth savings account like those offered at CPS IBEW FCU, which requires no minimum balance, has no monthly service fees, and pays out dividends monthly.
And while your child is building their savings year by year, consider teaching them financial responsibility in other ways. Family events like planning a big trip or getting a pet can be terrific opportunities to teach money smarts. We love
this U.S. Consumer Financial Protection Bureau guide that offers tips on turning pet ownership into money skills at any age, from preschool to the teen years.
For instance, “Pet food comes in many varieties, and your teenager can help you gather information from stores or shopping websites and compare them in terms of nutrition, cost, and other factors. Your teen can research and choose a vet or help estimate the cost of food and care for a pet like yours over time,” the guide explains.
And remember that once your child turns 18, they may still need your help and guidance. At least for a while. More than
96% of college students report having credit card debt, after all (their average debt is already $3,280 by the time they graduate). Lay the groundwork for your teens to make better decisions by teaching them lessons that perhaps you wish you had known at their age, like the risks of saying “yes” to
store credit cards, the difference between
“good” and “bad” debt, and the dangers of
cash advances and quick cash offers. Acquiring a credit card when a child becomes a young adult can be a great way to build a more robust credit history, but it will only help if it is paid off in full every month. CPS IBEW FCU can help there, too, with
low-interest rates and no annual fees.
So don’t forget that children can take advantage of being
CPS IBEW FCU members, too. And, by starting early, imagine how far they’ll get in unleashing the power of savings by the time they’re on their own.
