Starting young: How to build smart money habits and prepare kids for financial success

April 28, 2025 at 12:21 PM EDT

(BPT) - 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 they have an understanding about budgeting, saving and wise spending habits the more likely they are to continue those strong financial behaviors into adulthood," said Chief Marketing Officer Michael Watson from ICCU, one of the fastest-growing credit unions in the country. "Youth financial literacy can also help kids develop life skills like decision-making and problem-solving by teaching them how to manage their own money."

In order to get your child started on the right financial path early in life, consider these saving and spending tips.

Save from the start!

From their first lucky penny to 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 help grow their understanding and their balance!

Take the taboo out of talking!

Talking about money can feel uncomfortable, but it doesn't have to. By starting young 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 ATM, tapping your phone at the grocery store or writing a check to the PTA, 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?

Start spending wisely

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 young account holders reassurance, while offering young people the independence to learn. But, in the same way you wouldn't simply hand over the car keys without lessons, coaching and regular reinforcement, stay close. Check in on balances, discuss deposits and the split between savings and spending, and talk about purchasing decisions too.

From toddler to teenager, it's never too early to set your child on a path to financial literacy.

By creating opportunities for learning through both dialogue and actions, parents can help set their children on a path to financial literacy while also encouraging their children to ask questions. Whatever stage you and your child are in, start the conversation today or visit any ICCU (iccu.com) branch for resources on setting you and your children up for financial success.

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Starting young: How to build smart money habits and prepare kids for financial success

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