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Monday, May 27, 2024

How to prepare your kids for financial success

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Indianapolis Recorder’s Money Smart Week continues with Everwise Credit Union sharing steps for preparing your kids for financial success.

Teaching your kids about money and preparing them for the future financial responsibilities they will have someday is a key part of your family’s financial wellness.

Here are 6 steps to prepare your kids for financial success:

Talk to your children about money. Have a conversation with your children about finances. It is an important milestone that will create excitement about gaining “big kid” responsibilities. After your discussion, schedule a time when you and your child can visit a bank or credit union.

Open a savings account. There are specific savings programs available geared towards kids. For example, Everwise Credit Union offers a Kids Club that’s designed for children up to age 12. Parents or guardians can open a membership with the child as the primary owner. Kids get a piggy bank upon opening an account and can learn and grow with free online financial education tools, designed especially for parents and kids to use together.

Teens can open a Student Rewards Checking account to manage their money and earn cash rewards. The account features cutting-edge technology for 24/7 banking, everyday buying power with a cash-back debit card, and cash rewards for teens who learn more about money management and then take a few simple steps.

More keys to financial success: Buying or leasing a car

Getty Image of family putting money into a piggy bank, used for the story 'How to prepare your kids for financial success' during 2024 Money Smart Week.
(Photo/Getty Images)

Visit frequently. It’s recommended to visit a branch often to foster good habits for kids who want to learn about saving money. A perfect time to deposit funds into a saving account would be when they receive money for chores or reaching milestones like birthdays and graduations.

Agree on a savings and spending amount. Kids should learn about the value of saving for the future while also spending responsibly. Make agreements with your kids when depositing money. If they don’t want to deposit all of it, go half and half. Let them spend some and save some. Emphasize the receipts when they make a deposit to help illustrate that their balance is growing. In addition, help them set realistic and achievable savings goals.

Learn about banking language. Savings accounts can help teach important life lessons, like the difference between a “want” and a “need.” They can also help educate children about how to save for a “later” reward. Plus, opening an account for your child can also teach them about necessary banking language, such as savings, deposit, balance, withdrawal, and interest.

Monitor the account together until your child is 18 or older. For kids under 18, a parent is required to help open the account for them, so usually they choose the login information and password together so they can both monitor the account. When the child turns 18, the parents can choose to remove themselves from the account.

Catrina Tate is vice president of Retail at Everwise Credit Union with more than 21 years of banking experience. Visit everwisecu.com. For more news from the Indianapolis Recorder during Money Smart Week, visit our archive here.

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