Financial Tips For Youth…Priorities!

[ 0 ] January 26, 2012 |

Our series of blogs over the next couple weeks will feature tips from Cynthia Behrends, mom of our 2012 College Scholarship winner!  Cynthia’s children are financially responsible and aware of how savings goals can play a really big role in your future.  They have been credit union members since they started out in the Kirby Club.  Here is part 2 of 4 blogs we will feature Cynthia’s insight to keeping your kids educated and aware of finances!

How did you keep it a priority?

“I kept saving a priority when they were preschoolers by letting them participate.  They would come with me when I went to the Credit Union.  The first thing they would do was check out the Kirby gifts.  When they asked if they could buy the item, I would ask if they had enough Kirby dollars yet.  If they didn’t they would go home and immediately go see how much money they had saved – some of which was Christmas or birthday money they thought they might want to spend.  Their minds changed when they decided they could deposit the money and still get a Kirby gift.  It was a reward for saving.  They actually looked forward to going to the IAA Credit Union to see if they updated the prize selection.  They began bringing their Kirby dollars with them just in cases they saw something they really wanted to purchase.  Switching real money for Kirby dollars seemed pretty easy to them.  It taught them that they had to save for a long time in order to purchase a gift of their choice.  That began their mindset of saving which later turned into a habit of saving.

As they reached school age, I kept saving a priority by showing them how saving $1,000 grew interest whereas spending didn’t.  The Kirby Club allowed children to open CD’s with a minimum deposit of $500 so we would open CD’s as soon as they reached that amount.  They knew that CD’s earned higher interest rates than savings accounts so it became a game between them of who would reach the $500 first.

When they started junior high school, I showed them a mortgage amortization schedule and we discussed how much you pay in interest over 30 years.  They were shocked seeing how much each $1,000 saved towards a down payment would make a big difference in the total cost of the loan.  I shared with them that having 20% down payment on your first house makes life much easier.

At age 16, I opened them a checking account and obtained a Visa credit card in their name with a $500 limit.  I advised them that we would reimburse for gas purchases only.  Otherwise, they were to pay the balance.  They needed to learn how easy it is to charge something but how difficult it is to actually pay for that item later. We also discussed the interest rates on credit cards and told them it’s very important to pay off the balance every month.  If you are unable to do that, then put the item back and don’t purchase it.

Once they started college, I made them contribute $2,500 each year for their education. I felt it was important for them to have a partial ownership in their college education.  It gives them a sense of accomplishment and they are forced to consider all purchases because their contribution to college is their number one priority.  They have all realized how long it takes to earn $2,500 each year when they make slightly over minimum wage.  It has taught them not to take money for granted.”

Great tips and information Cynthia!  I am already planning how to use what you have taught your kids to teach mine!


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Category: Kids

About the Author ()

Hello! I have been with IAACU since August of 2011. I am a Member Development Rep. You might have talked to me a few times on the phone or through e-mail.

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