How to build smart money habits for kids
August 2025
From their first lucky penny or birthday money, you can teach your kids the importance of saving. (courtesy Brandpoint)
story courtesy of Brandpoint
It’s never too early, or too late, to establish good money habits with children. Teaching kids about money, including saving, spending and budgeting, can develop financial literacy, which in turn develops responsibility and decision-making skills while establishing the foundation for financial success.
The benefits of understanding finances as a child can develop into future financial independence, reduced debt and higher savings as children grow into adults. “It’s so important to start teaching kids about money while they are young.
“The more kids understand budgeting, saving and wise spending habits, the more likely they are to carry those strong financial behaviors into adulthood,” says Chief Marketing Officer Michael Watson of ICCU, one of the fastest-growing credit unions in the country. To help your child start on the right financial path early in life, consider these saving and spending tips.
SAVE RIGHT FROM THE START
From their first lucky penny or birthday money, you can teach your kids the importance of saving. Opening a youth savings account is a great way to engage your child with money. Look for an account that offers free automatic parent transfers. While this may be less important at the toddler stage, it becomes increasingly helpful as children gain independence and managing financial transfers becomes more necessary.
From depositing birthday money or loose change they’ve collected to watching their savings grow, opening a savings account where they can see and interact with their funds will enhance their understanding and increase their balance.
MONEY TALK ISN’T TABOO
Discussing money can sometimes feel uncomfortable, but it doesn’t have to be. By starting early and using natural interactions to explain your spending decisions, you have the opportunity to teach your child while also encouraging them to ask questions as they form their understanding of financial literacy.
Whether you’re pulling money out of an automatic teller machine, tapping your credit card at the grocery store or even writing a check, leverage daily money moments to talk to your children about money. What is it? Where does it come from? How do various payment forms work? How do you decide what you do and do not spend your money on?
WISE SPENDING HABITS
As children grow, it’s natural for conversations about money to shift to their interest in spending. One of the first steps toward financial success is creating a safe way to save, monitor and spend. Consider opening a youth checking account that is separate from their savings account. Look for accounts with free parent transfers, free mobile and online banking, and free credit score monitoring.
This level of protection offers parents and kids reassurance while offering young people the independence to learn. Check in on their balances, discuss deposits and the split between savings and spending, and talk to them about purchasing decisions. From toddler to teenager, it’s never too early to set your child on a path to financial literacy