How Can My Child Become Financially Successful?

April is National Credit Union Youth Month and it is a time when Credit Unions across the country focus their attention on helping young people improve their financial literacy. This is a noble endeavor worthy of our time and attention because it can have a significant impact on the future of a young person.

The importance of financial literacy was even recognized this past year as Michigan House Bill 5190, a bi-partisan bill, was signed into law on June 16, 2022 by Governor Gretchen Whitmer. According to the press release issued by the Governor’s Office on the date of signing, this legislation will “add a half-credit personal finance course as a high school graduation requirement, starting with ninth-graders in 2024” (www.Michigan.gov).

Is there a way that parents can ensure that their child is on the path to financial success even before they reach high school? Definitely! Parents have the greatest opportunity to impact their child’s future by taking the time to teach them about money at a very young age. While many parents may feel ill-equipped to tackle this initiative—especially if they haven’t had any personal finance training themselves—a local credit union can be a parent’s Most Valuable Partner and a savings account can be one of the most helpful tools!

What are the benefits of opening a Youth Savings Account at an early age? Here are just 3 of the many benefits to consider:

Helps a child keep track of their money

A piggy bank can be a great temporary holding place for money, but a savings account provides an accurate accounting of their savings progress. As a parent and child review the monthly statements, the child begins to understand what it takes to accumulate specific amounts of money required for desired purchases or long-term goals, and they are able to see it in writing!

Helps a child become familiar with financial tools

Not only does a child become familiar with the afore-mentioned statements, but they begin to have opportunities to utilize other tools such as online banking and mobile banking, and eventually checks, payment services, digital wallets, and more! As they begin to save, they will also become familiar with the concept of interest and how it compounds over time, which is an exciting thought when viewed in contrast to paying interest to borrow money!

Helps a child avoid the path of going into debt

Because a child learns how to save for future goals, they develop a habit of knowing what things cost and how much they need to make those purchases. As they develop a savings mindset, they will find it less likely to be in situations where they will need to borrow, or in the case of larger purchases, such as a house, they will not need to borrow as much! This will ultimately result in them becoming more self-reliant and experiencing a life of financial freedom.

Of course, there are so many other benefits, but we’ll stick with those three just to keep it simple and easily attainable for any parent who wants to start their child down the path to financial success! If you have questions, or want to open a savings account for your child, go visit your local credit union! It’s definitely a great place to start!