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Money talks—are you teaching your kids to listen? April is both Credit Union Youth Month and Financial Literacy Month, so it’s the perfect time to spotlight the importance of teaching your children about money from a young age, fostering financial literacy that will benefit them for life. Here are achievable ways you can support major milestones along your child’s financial journey.

Learning to Save: The Early Years (3 to 6 Years Old)

Teaching young children to save money—perhaps the most critical financial habit to develop—creates a solid foundation. It helps children understand the value of money and the satisfaction that comes from saving for something they really want, which also promotes patience and self-discipline.

Here’s what you can do:

• Set goals: Turn saving into a fun competition and keep your child engaged by creating reasonable goals with worthwhile rewards, such as $5 for a small toy or $10 for a trip to the movies. Keep track of their progress with a fun poster or chart.
• Show them how you save: Children learn best by example. Show them your own approach to saving (in simple terms), such as a physical savings jar or recent contributions to your savings account.
• Join in: Keep a savings jar in a visible area of your home, like the kitchen, and contribute to it each time your child puts money in their savings. Making this a joint activity can keep saving exciting, especially for younger children.

Tip: Credit unions often have excellent starter savings accounts for kids. American Heritage Credit Union offers five youth accounts tailored to different ages, from birth to early adulthood.

Spending Wisely: The Middle Chapters (7 to 12 Years Old)

As kids—and their savings—grow, they face new financial temptations. By this age, your child likely has a basic understanding of money, can handle an allowance, and can decide how to spend or save their money. Now is the time to emphasize smart spending habits and help your child learn to think before they buy, as well as to introduce budgeting in a simple way. This can help minimize impulsive or frivolous as they get older.

Here’s how you can help:

• Introduce budgeting: Give your child an allowance, and work with them to create a budget for it. Review and update it with them each week. This gives children a concrete record of how much they’re spending and on what – as well as how quickly the money can go. It also gets them into the habit of regularly making time for budgeting, another vital financial skill.
• Teach priorities: Kids commonly struggle to differentiate between needs and wants or to think about their purchases in light of long-term goals or desires. Create an activity or game that requires your child to decide if items are needs or wants, such as using simple flash cards or asking them to create a faux grocery list with a strict price limit.
• Involve them in shopping decisions: Part of smart spending is being able to gauge if something would be a smart purchase. Explain why you buy the brands and items  you do, using rationale like longevity, functionality, convenience, and cost. Sharing your decision-making process demonstrates and encourages thoughtful spending.

Tip: Make screen time educational. Look for kids’ budgeting apps that turn learning basic financial literacy into a game.

Gaining Independence: Teen Territory (13 to 17 Years Old)

Nearing the cusp of financial freedom, teens have bigger dreams (and expenses). They’re often ready to take on more responsibility, learn more complex financial concepts and tools, and set more significant goals for themselves. Those in their mid-to-late teens are often earning paychecks for the first time, too. It’s the ideal period to explore savings accounts, checking accounts, and the basics of credit.

Here’s how to support their budding financial independence:

• Let them open an account: Make sure your child has both a checking account and a savings account. Talk to them about the importance of tracking their available balance, watching for suspicious activity, following sound security practices, and understanding account fees, such as overdraft penalties.
• Discuss credit: Explain credit basics, particularly the significance of credit scores and credit reports and what they can impact, like financing or housing eligibility. Discuss the risks and rewards of credit cards, as well as how to manage debt responsibly.
• Encourage earnings: Employment teaches valuable life skills, looks good on a resume, and gives your child hands-on experience with budgeting and managing an income. Urge your child to earn money from a part-time job, and let older teens take over one or two of their expenses that you’ve previously paid, such as their cell phone or car insurance bill.

Tip: Look for financial education opportunities in your community that are geared toward teenagers—such as webinars, workshops, or budgeting classes held by your financial institution—and offer your teen an enticing reward if they attend. Alternatively, have them explore online financial literacy resources and tools, like American Heritage’s Learning Center.

Launching Into Adulthood: College and Careers (18 to 22 Years Old)

Your child may legally be an adult now, but their independent financial journey is just beginning. As they enter college, vocational training, or the workforce, they face complex financial decisions and situations, from taking out student loans to managing the expenses of living away from home. The stakes are higher than ever, and decisions can feel monumental.

Here’s how you can help them navigate the transition to adulthood:

• Seek out scholarships: If your child is pursuing higher education, exhaust all scholarship options to minimize student loan debt. Scholarships are available through your child’s higher education institution, and opportunities can also be found online or in your community, such as from a local financial institution.
• Start building credit: Credit takes time to build, and early adulthood is an ideal time to start the process. Consider adding your child as an authorized user on your credit card account, which allows them to build credit without needing to pass a credit check or approval process. Just remember: you’re responsible for any charges they make on the card. Your young adult can open a credit card account of their own, too, but they may be tempted to overspend without any oversight.
• Think long-term: As your child enters the workforce, speak with them about preparing for the future. Stress the importance of prioritizing retirement planning, explaining the different retirement account types and the basics of investing. Ask your kid about their goals, such as saving for a down payment for a home, and help them create a plan to achieve them.

Tip: With expenses like rent, utilities, groceries, and medical appointments, budgeting as an independent adult can look a lot different than budgeting as a teenager. Before your child moves out, discuss complex aspects of budgeting with them, and have them develop fake budgets for mock scenarios that are similar to what theirs will be.

Forming a Fruitful Future, Together.

From their first piggy bank to their first paycheck after graduation, your kid’s financial milestones can set the tone for their finances for the rest of their lives. By instilling financial literacy and healthy money habits throughout childhood, you’re imparting sustainable, practical knowledge to your child, empowering them to build a confident, thriving future.

One of the most effective ways you can imbue good money habits into your children is by modeling examples of it yourself. If you want to improve your financial health or if your child is ready for their very own account, reach out to American Heritage Credit Union today. With ample youth accounts, high-yield savings accounts, and digital banking tools, we have everything you and your family need for a better future in Philadelphia, Pennsylvania, and beyond.