Kids These Days… Need This Financial Checklist
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Kids these days… are learning a lot from you. They are watching. They are listening. A little creepy, right? Sometimes we forget our kids are capable of understanding more than we give them credit for. Before they leave the comfortable nest you’ve built, let’s give them the wings they need to succeed financially.
When you talk about money there’s not always a right or wrong answer. It’s a grey area which can make teaching it a little more difficult. Everyone handles and views money a little differently so that’s why discussing money challenges and successes are so important in the family dynamic. There are times when private conversations are needed about money (or lack thereof) but sometimes it’s important to loop the kids in too. You’re not doing it because you need their opinion, but because they need it as a part of growing up:
- They need you to normalize talking about money.
- They need you to teach them how to handle and save money.
- They need you to empower them, instilling confidence in money management as they prepare to leave home.
So, what should you be doing now to help your kid become more comfortable and knowledgeable about money matters? Here’s our 10 item checklist for how to empower your kids financially:
- Start their savings account when they’re born or as soon as you can after reading this article. It takes just $5 to start a Signet savings account. If you’re prepping for a baby, ask everyone to “fill the baby’s piggy bank” with their change when they come in the door. It’s a quick, simple way to start their account and most people won’t notice the few quarters they contributed from the bottom of their purse or pocket.
- Bring them into the credit union with you. First, we love seeing your kids grow up! Second, and more importantly, we know if they see you taking care of business here, they’ll start to grasp how the credit union works. They’ll know where to come when they have financial questions as a young adult, especially if they already have an account with us.
- At 16, start their checking account. Walk through with them how to manage it:
- Help them set up a system for keeping a record of purchases. They may not want to do the old check register, so get a budgeting app, or help them set up a note on their phone with all of their transactions listed.
- Show them how to balance/keep an eye on their account.
- Talk to them about fraud and set up alerts within their account. Remind them to contact Signet immediately if they notice any suspicious activity on their debit card or checking account.
- Start their college savings at a young age. At Signet, we offer Coverdell Education Savings accounts. As you build this account, earnings grow tax-free as long as distributions are used for qualified educational expenses. We’ve all seen the struggle many millennials and young college students are experiencing with high student loan debt as they enter the workforce. Give your student a leg up once college enters the picture.
- Help them set and reach financial goals.
“Cindy and I encouraged our girls to save money for a specific item (i.e., a trampoline) so they could reward themselves when they achieved the goal they set. They learned the concept of when you save money, you are paying yourself. – Dale Adams, VP of Marketing
- At 18 (or sooner) teach them about their credit score.
- What decides their score?
- Why does their credit report and score matter to their life goals?
- How do they check it and when should they check it?
You can read more about credit scores here.
- Involve them in your finances. Introduce them to your family budget. Help them understand how you make money decisions. Explain why you did or didn’t buy the new TV. Or, help them see the difference between a big family beach vacation vs. a fun weak camping at the lake.
- Give them the opportunity to make money decisions. Did they get money for their birthday? Let them decide how they’ll spend it. Maybe to you they’re wasting that money, but it might be a good real-life learning experience for them while the stakes are still small.
- Give them guidelines for how you expect them to manage their money from the cash they got at Christmas to their first job’s paycheck. This might be 10% goes to charity or 20% must be saved for college. You aren’t controlling all of their money but you are teaching them how to prioritize and use their money responsibly.
- Show them how to use the credit union to their financial advantage. It’s one thing to save money, but it’s another to use the tools Signet provides to make managing and saving even easier.
“I always tried to put a small amount of each paycheck to Savings, Christmas Club, loan, etc. Now my girls have direct deposit and are doing the same thing. It deposits each paycheck so they never miss it and always have money for Christmas and vacation!” – Carlene Scillian, Signet President
- Walk them through the loan process. Even if they don’t need the loan yet. Meet with a loan officer and show them the types of loans available. Explain what they’ll need to apply, how loans work and when they should get a loan vs. using a credit card.
There are so many lessons, but start with these 11 and see where the conversation takes you. Here are a few other helpful articles to check out: