Teaching Children About Money
One of the most important gifts you can give the children in your life—whether they are your own kids, grandkids, nieces, or nephews—is a strong foundation in managing money.
The Three-Jar Allowance
To learn how to manage money, children need some hands-on practice. Typically, this starts with an allowance or earnings from small neighborhood jobs. Deciding how much to give and whether to tie it to chores is a heavily debated topic, so choose the path that fits your family’s values. The core goal is simply to give them a tool for learning how to plan.
For younger kids, a visual budget works wonders. Try using three clear jars labeled:
- Spending: For immediate, small purchases (like treats or small toys).
- Short-Term Savings: For bigger targets that take a few weeks or months to reach.
- Long-Term Savings: For distant goals, like a first car or college.
Separating physical cash into clear jars lets kids visually witness their savings grow. If you want to encourage sharing, you can easily add a fourth jar for Charitable Giving (setting aside a fixed amount like 10%).
Once physical piggy banks start getting crowded—or if you have a multi-child family where piggy banks are prone to accidental “raiding”—it’s time to move to the credit union.
At Abilene Teachers FCU, our youth savings accounts require no monthly fees or minimum balances, and they actively earn dividends. We offer the Savings Safari Account (complete with Safari Bucks for fun lobby prizes) for kids ages 0–12, which smoothly transitions into our Skills for Life Teen Account once they turn 13.
Balancing Spending, Saving, and Goals
Part of the financial literacy conversation is teaching kids that a budget isn’t set in stone; it involves making constant adjustments. Help your child map out their weekly expenses to determine their “Spending” jar balance, and let them choose one specific goal at a time for their “Short-Term Savings.” Experiencing the patience it takes to save for an item is a crucial lesson—even if they discover down the road that the toy wasn’t actually worth the effort!
For long-term goals, a 10% benchmark is a great starting point. To make long-term saving exciting, consider offering a “parent match,” contributing 50 cents or a dollar for every dollar they securely tuck away.
Take the Next Step
When you’re ready to open a savings account to transition your child from jars to digital banking, our Member Service Representatives are here to help. You can explore the details on our Youth Savings page.
Looking for another fun, interactive way to practice? Check out our Banzai! platform, which features free, real-world life simulation games designed to teach kids, teens, and adults the power of smart budgeting in a fun, gamified way.
