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Family & Finances

Raising Money-Smart Kids

Talking to kids about money is not only acceptable but also encouraged. Use our tips to help your child develop and practice age-appropriate money management skills.

Ages 3-5

Most kids have their first consumer/retail experience within a couple of weeks of being born. As kids grow and get older, they start to adopt money habits just by watching those of their parents and others in their life.

With children this age, it’s important to keep it simple and work on the basics – earning, saving, and spending.

Key Lessons To Learn

  • Discuss your job with your child. Talk about how when you go to work, you’re getting paid for the hours you’re there and the work you do.
  • Talk about other people in their lives that work to earn money – like a babysitter or store employee. Walk/drive through your neighborhood or town and ask them to point out other people they think are working to earn money.
  • Explain how some people choose to start their own business to make money.
  • Ask your child to think of ways they can earn money.
  • Work with your child to set a short-term financial goal. Keep the time frame short — within a couple of weeks. Ask them what they’d like to accomplish and how they plan to do so. Draw a picture of the goal together and put it somewhere they can see it every day. Work with them to accomplish the goal.
  • Find a jar or can, and label it for saving. Suggest your child put some of the money they get into the saving jar, so they can buy a toy or treat when they’ve saved enough.

  • Grab some loose coins and work on sorting them. Talk with your child about the differences between the coins – not just in size, but in value.
  • Make a list of free activities your child enjoys, such as playing with a friend or going to the library.
  • Discuss how you use money to buy things. While you’re out shopping, have them point out things that cost money. Depending on their age, ask them to identify the cost of the item they’ve picked.
  • Begin talking about needs and wants. Talk about needs as the very basic items you must have to survive – like your house or food and water. Ask them to identify other needs.
  • When you’re out shopping, point out essentials, such as food and clothing, and ask your child to describe items that they may want but are optional.
  • Have your child help you with the grocery list. Work on the needs first and then put down the wants. Then, explain there’s a set amount of money to purchase everything. After purchasing the needs, there may or may not be enough to purchase the wants on the list.
  • Think out loud about your budget and how you mentally divide up a finite amount of money into sections for food, rent or house payments, clothes, and optional items.

Skills & Abilities

At this age, children should start to learn how to plan ahead, wait for things they want, and finish what they start. These skills and abilities are key to staying financially healthy.

It’s always important to remember that you’re teaching your child(ren) about money, whether it’s on purpose or not. They observe and listen to what you do and what you say.

If you don’t feel confident in your own money skills and knowledge, you’re not alone. Use this as an opportunity to learn more about fiscal matters. You don’t need to be an expert or talk about complex financial topics – with young children, just focus on the basics.

Two kids selling lemonade at a lemonade stand. An adult is giving them money.

Easy Ways To Teach Kids About Earning

Learning to earn money by putting in hard work is a valuable lesson – even at an early age. Here are ideas to instill a sense of achievement in children and help them learn the value of work.

A child laughing.

Powerful Money Lessons For Kids

Start with these six lessons, have meaningful discussions, and lead by example. With proper guidance and opportunities to put these fundamentals into action, your little one(s) will be off to a great start.

Ages 6-12

At this age, kids are more aware of money and the role it plays in their lives. It’s important to help them build a saving habit and learn about smart spending.

Again, keep it simple and continue to work on the basics – earning, saving, planning, spending, borrowing, and protecting.

Key Lessons To Learn

  • Discuss how people make choices on how they earn money. For example, some people work for others or companies while some work for themselves.
  • Consider an allowance. Giving a child an allowance is a personal family decision. Read more about the pros, cons, and types of allowances here.
  • If your child receives money as a gift, talk with them about the options for what they can do with it.
  • If your child brings up their friends and peers, use it as an opportunity to talk about how each family’s financial situation and priorities are different.
  • Encourage your child to save at least 10% of everything they earn. Ideally, they’d save more, but 10% is a good start. Have them write out their savings rule and have it displayed where they can see it regularly.
  • After their savings accumulates, visit the credit union to make deposits. Show them how their money has grown over time.
  • Have them set a goal for something they want to purchase. Together, create a plan on how they’re going to reach their goal. Make sure the goal is SMART: Specific, Measurable, Attainable, Realistic, and Time-Bound.
  • Discuss reasons to save and have your child pick the ones that resonate best with them. Ideas include: to have the freedom to make choices, to have funds during downturns, and to feel financially secure.
  • Consider a “matching plan” for your child’s savings: You put in 25 cents per dollar saved. Encourage your child to draw, make a chart, or tell a story about how this helps their money grow.
  • If you haven’t already, visit an A+FCU branch together to open a Youth Membership Savings Account. Have your child go through the account opening process and encourage them to ask questions. Ask the Member Services Officer to explain how the savings account works and how interest works.
  • Have the Member Services Officer talk about how money in savings accounts is safe and protected.
  • Once the savings account is established, encourage them to make deposits to their account regularly. Help them track their balance and show them the interest that they earn.

  • Ask your child to set a goal for something they want to do or buy and talk about the steps it would take to get it. Over time, check in to see how the steps are going and whether that goal is still important.
  • Share your own tips and strategies for how you make plans and get yourself to stick to them.
  • Practice making a list before you go to a store or on a shopping trip. Talk about how easy or hard it is to stick to the list.
  • When out shopping, include your child in small money decisions, like which kind of cereal or fruit to buy. Show them how you make your decision by explaining the differences in cost and quality.
  • Give your child a small amount of money ($2-$3) and with it the freedom to purchase something – you can narrow it down to a certain type of item. Explain that they can choose what to buy, but can’t go over the amount you gave them.
  • While shopping with your child, go through your decision-making process with them. Ask yourself questions aloud like, “Do I need this?” or “Would it cost less somewhere else?” Explain your answers.
  • Comparison shop for a particular item your child wants. Together, look at prices online and in store. Don’t forget to talk about other costs, like shipping and taxes. Ask them which is the best deal and why.
  • Have your child help you find coupons. When you use the coupons in stores, explain how they help you save money. Use the receipt and show them how much you saved.
  • Bonus: if they help you find coupons, allow them to keep part of the savings.
  • Talk with them about how online offers that appear to be “free” can be scams to get them to unknowingly spend money.
  • Remind them to think twice before buying. If something is too good to be true or is too easy to purchase, take a moment to step back and evaluate.
  • Discuss advertising and that the goal is to try and get you to spend more money but that the decision to spend is ultimately up to them.
  • Talk about credit cards and the dangers of buying something you can’t afford. While compound interest is great for saving, it’s not so great when it comes to debt.
  • Discuss the advantages of a credit card, especially for making purchases online, and how when it’s used smartly, a credit card can be a good way to build credit.
  • Drive home this rule: if you use a credit card, aim to pay it back in full each month. Otherwise, you could pay more due to interest charges.
    To show how much and how long it would take to pay a $1,000 credit card balance making only the minimum payment, use our calculator.
  • Talk about the differences between smart and dangerous borrowing. Examples of smart borrowing could include getting a mortgage to buy a home or even borrowing money to go to college. Examples of dangerous borrowing include store credit cards or maxing out a credit card knowing you can’t afford to pay it off in full.
  • Always know the websites your child visits and block those you don’t want them on.
  • Talk about the dangers of giving out personal information online, like their birthdate, address, phone number, email, or school. Explain there are people who’ll use this information to do bad things.
  • Don’t allow them to buy anything online without your permission, and be careful with apps on phones. Many of them have in-app purchases, making it easy for kids to buy things.

Skills & Abilities

At this age, your child should develop skills such as:

  • Having a positive attitude about saving, being frugal, and exerting self-control
  • Being able to plan ahead and save for wants
  • Making money choices that align with goals and values
  • Having self-confidence in starting an unfamiliar money task

If you don’t feel confident in your own money skills and knowledge, you’re not alone. Use this as an opportunity to learn more about money on your own. You don’t need to be an expert or talk about complex financial topics – just focus on the basics.

An older man with two young children. They are holding a piggy bank between them.

Teaching Kids About Debt

Here are some simple strategies that can make learning about money, debt, and general finances easy and fun for your child.

A man with his arm around a young boy, he is looking at the boy and they are both laughing.

Help Your Kids Set SMART Goals

Encourage your child to think about what they hope to accomplish in the future and teach them how to be goal oriented. Guide, inspire, and celebrate them as they learn this valuable skill set.

Ages 13-18

As tweens and teens, money represents a lot. It’s the ability to go shopping, to the movies, grab a bite to eat, and more. Continue to reinforce smart money habits like saving, spending wisely, and making good choices, but also begin to talk about money habits beyond high school.

Key Lessons To Learn

  • Use your teen’s first job as an opportunity to discuss the difference between gross income and net income. Go through their first paystub and show them the money that was taken out for Federal Income Taxes, Social Security, Medicare, and more.
  • Discuss how taxes are used – national defense/security, schools, roads, medical help for the elderly, etc.
  • When it comes time to file taxes, show them their W-2 and go over what each of the numbers mean.
  • Money can also be taken out of their paycheck to pay for things like employee benefits, retirement, and more.
  • Talk about what compound interest is and how it helps your money grow. Use examples and calculators to show how it works.
  • In the example below, Ted and Mary are saving money for retirement. Ted saves $2,000 each year beginning from age 18 to 27 in an account paying 7% APY. Overall, he saves $20,000 in ten years. Mary begins saving at age 35 and also saves $2,000 each year until age 65. She saved $70,000 in 30 years. However, because of compound interest, and despite Mary saving an additional $50,000, Ted has over $90,000 more than Mary!
Scroll to see more details
Table comparing savings balances with compound interest
Details Time Saving APY* Money Saved Interest Earned Total at Age 65
Ted Saves $2,000/year from age 18-27 10 years 7% $20,000 $366,718 $386,718
Mary Saves $2,000/year from age 35-65 30 years 7% $70,000 $225,827 $295,827

*APY=Annual Percentage Yield.

Investments are assumed to be made annually and at the beginning of the investment period. Balance amounts are rounded to the nearest dollar and are not adjusted for inflation.

  • Once your teen has a job/starts earning income, talk with them about ‘paying yourself first’ – putting money into savings before spending anything. Encourage them to set a savings rule (for example, saving at least 10% of everything they earn) and set up automatic transfers if possible.
  • Explain that it’s important to have money set aside for emergencies – typically 3-9 months’ worth of living expenses.

  • Talk about long-term financial goals, such as buying a home and retirement. Encourage them to begin saving money for a long-term goal.
  • Discuss savings options, like a Roth IRA, and how they can help them save for long-term goals through compounding.
  • Explain that companies sometimes offer other types of retirement accounts, like a 401(k), to help employees save for retirement. These tools can help them set money aside in a special account that should only be used for retirement.
  • Discuss the financial benefits of continuing education after high school. Explain that while college or technical school might cost money up front, the long-term earning potential for those with a degree is typically higher than those with a high school diploma.
  • As they begin to research schools to attend, encourage them to look at tuition, fees, room and board, and other costs in addition to what the school offers. Use tools like the Net Price Calculator to research prices and compare schools.
  • Go through the FAFSA process before your teen is a senior using the FAFSA4Caster. Together, follow the steps to see an estimate of your teen’s financial aid. Use this information and the net price information to get a better idea of what continuing education will cost.
  • Research types of financial aid – including loans, grants, work-study, and scholarships – on the U.S. Department of Education website.
  • Work with your teen to develop a budget. Have them list their income and their expenses, then track their spending for a month. Explain how planning ahead, having a budget, and setting goals can keep them from overspending or needing to use a credit card to buy something they can’t afford.
  • Reinforce this rule: only use credit to buy things you can purchase with cash. Never buy more than you can afford so you can pay the balance off right away.
  • Educate your teen on the cost of credit and how borrowing money can be risky if you can’t pay it back.
  • Talk about how having good or bad credit can impact things like getting an apartment, getting a job, or even being able to buy a cell phone.
  • Explain that a credit report is like a financial report card and is important to check frequently to catch errors and misreported information. If a credit report is a financial report card, their credit score is their financial GPA and should also be monitored.
  • If you feel comfortable, consider getting a low-limit credit card for your teen to use on a regularly occurring expense, such as gas. Walk them through the process of reviewing options, filling out the application, and the terms offered. Then, every month, have them pay off the balance in full. This can help them build credit while not incurring any debt.
  • Reinforce previous lessons on the dangers of entering personal information online. Use a personal story about someone who had their information stolen or had a fraudulent purchase made with their information.
  • Talk about the dangers in free offers found on the internet and how thieves and fraudsters use these kinds of ploys to get information and scam people into spending money.

  • Talk about how insurance can help you protect things that are expensive or even impossible to repair/replace. Ask them to think of things that might need insurance.
  • Remind your teen that like anything else, they should comparison shop when it comes to purchasing insurance.
  • If you don’t feel comfortable talking about insurance, see if your insurance agent would be open to going over key terms, like deductible, coverage, etc.

Skills & Abilities

At this age, your teen should develop skills such as:

  • Being able to manage money to reach a goal
  • Understanding key concepts such as savings, taxes, credit, budgeting
  • Identifying reliable resources for information
  • Building good money habits and confidence in making good choices

If you don’t feel confident in your own money skills and knowledge, you’re not alone. Use this as an opportunity to learn more about money on your own. You don’t need to be an expert or talk about complex financial topics – just focus on the basics.

two young girls looking at a tablet, one of them is holding a credit card.

Paying Yourself First

‘Paying yourself first’ is a simple, yet effective way to prioritize your savings. Whether it’s putting money towards a goal or building an emergency fund, you’re contributing to your future self’s financial success.

A teen sits at a table and eats a slice of pizza.

First Checking Account

Deciding when to open a child’s first checking account can be a difficult decision. Review these considerations and tips to help make it a little easier.

The Allowance Question

Raising money-smart kids means giving them the tools and knowledge to make solid financial decisions on their own. One of the best ways to do this is to give them money and allow them to make their own choices on how to spend and save it.

There’s much debate about whether or not children should be given an allowance. You first need to determine if you can afford to give your child an allowance. If you can, next you should weigh the pros and cons of an allowance to see if it’s right for your family.

Pros & Cons Of An Allowance


  • Lets them be responsible for their own money and learn to deal with the consequences of a bad decision can be a great way to foster wise spending habits.
  • Children learn the value of money and appreciate it more.
  • Money is coming from their pockets – not yours. They learn that when the pocket’s empty, they can no longer spend.


  • It could undermine the importance of contributing to the family.
  • Kids may not spend the money how you would like them to.
  • They may complain about not getting enough of an allowance.

When Should You Start?

Research shows that around preschool, children start to recognize the differences between needs and wants and understand that money is used to buy things. This can be a great time to start, especially if they begin asking questions about money.

If you don’t feel your child is responsible enough or they show signs that they don’t care or understand money, wait a little to begin.

Father and son wash dishes together

Three Main Types Of Allowances

#1: Chore/Grade-Based

With this type of allowance, you’re paying your child to do their chores and/or get certain grades. It teaches a child to work for their money, not just expect it.

However, some experts argue that children should do their chores to contribute to the family and get good grades to be a better student, not just to get paid.

Mom counts out cash allowance to two daughters

#2: Unconditional Allowance

An unconditional allowance has nothing to do with chores or grades; instead, children would receive an allowance regardless, guaranteeing first-hand experience with real money. Kept separate from their allowance, chores are expected because children are part of the family and good grades are expected to better themselves.

Some experts worry this type of allowance could teach children that money will just be handed to them, and not learn the value of working for it.

#3: Combination Approach

Combining these types can give you the best of both worlds. Provide an unconditional allowance that isn’t tied to any specific purpose while also allowing them to earn additional money by doing extra work.

This teaches your child they can work to earn more money while giving them enough to buy items as needed.

The combination approach to allowances teaches your child they can work to earn more money while giving them enough to buy items as needed.

Family prepares a meal together in the kitchen

How Often & How Much?

Once you’ve decided to give your child an allowance, the next step is to figure out how often and how much.

Some caretakers decide to do a weekly allowance, while others go with biweekly or monthly. If your child is younger, a weekly allowance may be better. As they get older, consider biweekly as that better represents an actual paycheck cycle.

A great way to determine how much to give your child is to tie the total amount to the child’s age. Some recommend giving them an amount equal to half their age; for example if the child is 6, give them $3 a week. Others suggest giving them $1 per year of age.

One of the benefits of tying the amount to their age is you don’t have to worry about when to increase their allowance. They know that on their birthday they’ll get a “raise”.


Set up a day to act as a payday for your child. On that day, give them their allowance in one dollar bills. The first couple of times you pay them, talk about what they plan to do with the money. Encourage them to set aside money and discuss the three main ways to use it: Save, Spend, and Share.

We encourage children to set ‘savings rules’ for their money. This means they set aside a certain percentage of any money they receive. For example, we typically recommend starting with 50%. This makes figuring out how much to save, spend, and share easier. As the child gets older and takes on more responsibilities with their finances, this number may need to be adjusted – just make sure they’re saving some of their money!

A woman and a young boy watching a cartoon on an Ipad.

Learn To Spend, Save, & Give

Learning about the three jar concept can help kids grow into money-smart and socially responsible adults.

Girl receives a shopping bag from a store clerk

Let Them Make Mistakes

When you begin giving an allowance, one of the most challenging things can be letting them make their own decisions and being to be ok with them making mistakes. Think of it this way: it’s better if they make a mistake at age six with $5 than at age twenty-six with $35,000.

Mistakes give children an opportunity to learn. If they spend their allowance in one day and have nothing later when they want or need something, use it as a teachable moment to talk about the importance of budgeting.

An allowance is a great tool to teach children about money and smart money skills. It encourages conversations about needs, wants, financial decisions, budgeting, saving, and so much more.

It’s A Money Thing®

At A+FCU, we’re committed to equipping youth and young adults with the knowledge and tools they need to make sound financial decisions.

Thanks to It’s a Money Thing, caretakers and youth may conveniently access financial education videos covering a wide variety of topics.

For Kids

For Teens & Young Adults

For Teens & Young Adults


  • Demystifying Mortgages: Get to know how mortgages work and learn about key terms like ‘fixed-rate’ and ‘adjustable-rate mortgages’, ‘annual percentage rates’, ‘principal’, ‘interest’, and ‘amortization.
  • Leasing vs. Buying A New Car: Get to know your financing options and the different ways to pay for a new vehicle to make an informed purchase decision.
  • Loan Basics: Get an introduction to loan types and key terms before tackling more advanced lending topics.
  • Owning vs. Renting A Home: Learn about the key differences between buying and renting a home to decide which option best suits you.
  • Predatory Lending: Learn about payday lenders, check cashers, pawnshops, and other high-cost alternative financial services providers to identify abusive or unfair lending practices.
  • Student Loans 101: Learn about the differences between federal and private student loans and things to consider before signing on the dotted line.
  • Strategies For Debt Repayment: Learn about the three approaches to building a debt repayment plan: the Snowball Method, the Avalanche Method, and Consolidation.


  • Boost Your Credit Score: Get tips on how to maintain a healthy credit score and see how your credit report can be a useful financial tool.
  • Breakdown Of A Credit Score: Take the mystery out of credit scores with this video that shows how credit scores are calculated and why they’re important.
  • Comparing Cards: Compare and contrast debit cards, credit cards, and prepaid debit cards, and make informed decisions when it comes to your preferred payment method.
  • Using Your Credit Card: Learn about concepts – including billing cycles, payment due dates, and credit card statements – and better understand the reason to pay in full and on time each time.



Raising Money-Smart Kids Resources

Help raise money-smart kids with these resources.

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