Learning to save for what you want in life is a crucial life skill, but it’s one too few young people are learning. The first step to teaching your kids about money is talking about money. That’s why for financial literacy month, we’ll focus on helping young people develop good saving habits.
The theme this year is Give a Hoot About Saving. “Owls represent wisdom, and nothing is wiser than learning to save for one’s future goals,” said Community Outreach Specialist, Lori Hudson. A 2015 T. Rowe Price survey found that 72% of parents experienced at least some reluctance to talk to their kids about financial matters, and 18% were either very or extremely reluctant. The most common reasons given were that the parents didn’t want them to worry about financial matters or thought they were too young to understand.
But on his blog, the personal-finance guru and radio host Dave Ramsey encourages parents to be more open with their kids about money, even their failures. Parents’ biggest regrets are often not saving enough or going into too much debt, wrote Ramsey. Being honest about that in an age-appropriate way, he stated, can be a powerful lesson.
So how to start the conversation?
- Ask questions. If you’re going out to eat, talk about the price difference between the options, and ask them which they would choose. If they select the more expensive, talk through what you might have to give up later in the week.
- Make them part of your budgeting. If you’re doing any kind of financial planning for the year, solicit input from your kids. Enlist them in your saving goals—no one watches you more closely than your kids, so they’re natural accountability partners! If you’re uncomfortable revealing too much of your financial picture, you can keep the discussions high level, but involving them makes money less abstract.
- Open a Kids Savings Account. This is the best way to help them learn to save for what they find meaningful in life. A lifetime of good savings habits can start now!
“Member education and concern for the community are part of the founding principles of our business structure,” Hudson said. “Passing along a crucial life skill to the next generation to prepare them for a bright future embodies both those principles.”
Create wise savers by bringing your kids to the credit union and encourage them to start saving today. Make sure to follow along all month as we post more resources to help you raise financially wise kids. And don’t forget to enter our coloring contest to win some money to fund that new savings account!