Articles for Parents

Allowances Help Children Save

Having allowances can help children understand the concept of budgeting and saving, but you have to teach them.

If you decide to give an allowance, start one as soon as your children start recognizing money's worth--kids do this fairly early. Janet Bodnar, deputy editor of Kiplinger's personal finance magazine in Washington, D.C., stresses two points in her book "Dollars & Sense for Kids":

  • Don't give an allowance until children are old enough to manage it, or until your children are at least six years old. There's no need to rush things and preschoolers generally don't understand the abstract idea of money anyway. Once children start first grade they begin learning about money in school, so they know if they get a $1 bill each week, it's equivalent in value to ten dimes or four quarters.
  • Keep the system simple so you can manage it. "Denying kids an allowance doesn't make it easier to limit the amount of money they get their hands on," says Bodnar. Because most children will get the money out of parents anyway, it's better to teach them how to manage it themselves than allow them to nickel and dime you to death. Plus, using an allowance gives parents and children more control over the children's finances.
Contact ACU at 800.245.8112 for information about setting up a savings account for your children.

Teens - Check Out Your First Checking Account

Our teen checking/share draft accounts help you take a step toward financial independence by providing low-cost, flexible options.

Teen checking accounts typically are designed to serve teenagers age 13 to 18. If you're ready for an account, contact ACU to find out about the services we offer for our young members.

Once you know what an account will cost and what features are available, talk with your parents. If you're younger than 18, you might have to have a parent listed on the account with you. But the account is still yours to spend and to manage.

Tips for Parents of College-Bound Students

High-school students bound for college will embark on many new experiences--including financial independence. Here are some tips for parents to help kids prepare for what's in store.

  • Explain how credit works. If you provide your son with a credit card, or he applies and receives one while at school, he may not be able to manage it or afford the debt if he uses it up to its credit limit. A credit card is not free money; it's instead a means of putting off paying for purchases until a later date. Accompany him to the credit union for the best rates on credit cards and consider urging him to use a debit card instead.
  • Create a spending plan. Write down all college expenses such as tuition, books, room and board, toiletries, entertainment, and so forth. Determine which expenses you'll be paying and those for which your child will be paying.
  • Come to a no-bail-out agreement. If your daughter ends up charging more than she can afford, or runs out of money before the end of the month, your first reaction may be to send money and bail her out. Don't do it. If she needs to figure out a way to get out of debt, such as working or staying home on weekends, chances are good she won't make the same mistake twice.

Get Kids Started Right

We often hear that our children are our greatest asset, the door to the future. How can we help them build confidence in their financial future?

One good answer is a credit union share savings account. By encouraging regular savings at Ashland Credit Union, you prepare your kids to meet the demands of an increasingly complex financial world. A regular savings program helps both teenagers and younger children understand the basics of personal finance and the importance of building sound money management habits. It demonstrates the power of savings to help youngsters reach their goals. It prepares them for the day when they'll manage their own money.

Even very young children can grasp the fundamentals of saving, and become excited about having their very own savings program. As they grow and acquire allowances, after-school jobs, and other income sources, children can see those savings add up--and their pride and independence grow, too.

Perhaps the most important reason to start saving early and regularly is that saving helps young people develop the skills they'll need to be intelligent credit consumers. A record of regular savings tells the credit union this young person can handle the responsibility of repaying that first loan for a car, college, or educational travel.

Having demonstrated the ability to stick to a planned program, loan officers are more likely to approve the loan application. In this situation, the share savings account does double duty, because the young borrower--lacking any credit history--can use it as security for the loan.

So don't wait. Help your children open share savings accounts and encourage them to add to them each week or month.

Remember, it's not the amount of the deposit that counts: It's establishing sound, lifelong financial habits that will make more complex financial transactions later on easier, and more comfortable. Visit ACU now to start your kids on the road to confident money management.