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Teaching Your Kids About Spending and Saving Money: A Guide for Every Stage

Teaching Your Kids About Spending and Saving Money: A Guide for Every Stage
Achieve 2023 Financial Goals Affinity FCU Blog
By: AffinityFCU

May 25, 2023

We all want our children to grow into financially responsible adults. This is why it is essential to begin teaching them the basics of money management at a young age and this goal continues by introducing more complex topics over time. As someone who has two teenagers the below guide will walk you through some key financial lessons to share with your kids as they grow older, broken down by age group and are great for each step in their savings journey:.

Elementary School

Children are often more perceptive than we realize. Begin by explaining what money is and how it works. Teach them about the concepts of earning, spending, and saving. This is a great time to start providing an allowance for the completion of small chores, like putting away their clothes or helping pick up in the yard. Encourage your kids to save part of that money rather than spending it all quickly or impulsively — which can also lead into a good conversation about budgeting. Affinity is here to help with your child’s financial journey, offering youth banking accounts with a 4.00% APY on the first $10,000 and no balance requirements1.

High School

High schoolers are at an ideal age to start understanding more complex financial concepts. Introduce them to the principles of interest, loans, and credit cards, teaching them about the benefits and pitfalls of each. This is also a sensible time to talk about the importance of building and maintaining a good credit score. Additionally, you can encourage your teenager to get a part-time job, which would provide them with some extra money as well as education about financial responsibility and the value of hard work. Our high-yield SmartStart Savings account is a great option for high schoolers, offering them the opportunity to earn more than 10 times the national saving average2. Which was just named best credit union savings account for deposits under $10,000 by CNBC. 


By the time they reach college, your kids should be ready for greater financial independence. Teach them about student loans, including the long-term implications of debt. Stress the importance of budgeting, especially given the new expenses they’ll encounter like tuition, books and living costs. Encourage them to save and plan for emergencies. This would also be a good time to introduce them to investing by explaining the importance of starting early in life and the wealth-building power of compounding interest over time.

New College Graduate

Upon graduation, your children will likely face new financial challenges such as higher income, rent, possible student loan repayments and more. Now would be a good time to revisit the previous conversation about investing by emphasizing the importance of saving for retirement. The concept of “paying yourself first” becomes crucial here, so encourage them to set aside a portion of their income for savings, and then balance these savings needs with recurring bills and leisure spending. Also, discuss the idea of diversifying income sources and reemphasize the importance of maintaining a solid emergency fund for unexpected expenses.

Remember, the goal isn’t to make your kids financial experts overnight, but to gradually build their understanding of and comfort with money management as they grow older. Affinity offers comprehensive resources and advice, so please don’t hesitate to contact us3. By starting these discussions early, you can help equip your children with the tools they need to make smart money decisions throughout their lives.

This information is for informational purposes only, is intended to provide general guidance, and does not constitute legal, tax, or financial advice. Each person’s circumstances are different and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and/or legal counsel to discuss your specific needs before making any financial or other commitments regarding the matters related to your condition.