The Importance of Savings for Kids and Young Adults

How old were you when you started your first job? Did you have a savings goal in mind? Maybe you wanted extra income to save for a new car, pay for college, or just be able to afford to eat out with friends!

According to the 2021 US Young Adult Financial Independence Study, 75% of teens lack confidence in their knowledge of personal finance. 32% don't know the difference between a credit card and a debit card! To help prepare your child for financial independence, here are a few key practices to set them on the right track: cultivating a savings mindset, building a safety net, learning basic money management, and taking steps toward long-term financial preparedness. Read on to learn more.

Cultivating a Savings Mindset

Introducing kids to the idea of saving money early on can instill a lifelong habit of financial responsibility. Whether they receive a weekly allowance or earn money from odd jobs, encouraging them to set aside a portion for savings fosters discipline and foresight. A youth savings account can be a perfect tool for this purpose, allowing young savers to watch their money grow with interest while also learning the importance of setting financial goals.

Building a Safety Net for College Years

For many young adults, college represents their first significant financial challenge. Opening a student savings account can be a steppingstone toward building a safety net for their college years. Having savings can help them cover unexpected expenses, buy textbooks, or even pay for a well-deserved trip during school breaks. Financial stability during college allows students to focus on their studies and personal growth without worrying about constant financial stress.

Checking Accounts with Perks

As teens mature, they may require more financial independence. A student checking account can be a perfect tool to teach them how to manage their expenses responsibly. With a debit card linked to their account, they can learn to make purchases within their budget and monitor their spending. Parents can guide their teens through this process, setting spending limits and tracking transactions, ensuring they develop essential financial skills.

Money Management Made Easy

Credit Unions often offer educational programs that teach kids about managing money effectively. These lessons can include topics like budgeting, saving strategies, and the basics of investing. Participating in such programs can turn the learning experience into a fun and interactive one. These lessons serve as building blocks for their financial future, helping them make informed decisions when it comes to spending, saving, and investing their money.

Long-Term Financial Preparedness

By instilling a culture of savings and opening a student checking account, parents can empower their children to be financially prepared for adulthood. As they grow into young adults, they will have a solid understanding of financial responsibility, making them better equipped to handle life's financial challenges. These early lessons set them on a path of financial security and independence, ensuring a brighter and more confident future.

Find out how Financial Partners can help you and your child with the tools necessary to ensure financial wellness for years to come.
Schedule an appointment or give us a call at 844.TRY.FPCU.

^{*APY = Annual Percentage Yield.}

^{**5.00% APY rate applies to account balance $1,000 and below. For balances above $1,000 the standard account rate applies. Only eligible for Members ages 0-17.}

^{Rates are subject to change without notice.}