Money matters: Finance 101 for families

Financial literacy is as important to teach youngsters as reading or writing, according to experts.



Financial literacy is as important to teach youngsters as reading or writing, according to experts. And local banks and credit unions can play an important role in helping with that education. We reached out to a pair of experts to learn how to begin that process and how they can help.

Our experts: Anne-Marie Sousa, vice president of marketing and financial education at Jeanne D’Arc Credit Union, and Jennifer Marsella, marketing officer at St. Mary’s Bank.

What is the right age for my child to set up a savings or checking account?

Sousa: “What better present for a newborn than a savings account? It is truly the best gift to give a child, although they may not think so for years to come. Contributing to a child’s savings account for birthdays, holidays or other special occasions is truly a gift that keeps on giving because of the power of compound interest.

I don’t believe that there is a magic age that is right for children to have a checking account, however I strongly believe that before opening a checking account, the teen must understand the responsibilities of managing their money. At Jeanne D’Arc Credit Union we have online lessons that cover many topics such as checking/savings accounts, budgeting, credit and much more. They can be found at Moneystrong.org. All of these quick modules would provide valuable information for people of all ages. In regard to having a parent joint on an account, each financial institution has their own guidelines, but at Jeanne D’Arc a student can have an independent account at age 13.”

Marsella: “Introducing money concepts at a young age, even as young as preschool, is ideal for laying the foundation of good money habits.

1. An easy first step is opening a savings account so that children can begin to understand the concepts of earning and saving money. For younger children, we recommend a youth savings account opened with an adult custodian. For teenagers, we recommend a regular savings account with an adult custodian or joint owner.

2. As children get a little older, the next step is to open a checking account with debit card. A student checking account (with a parent or guardian as joint owner) offers a simple and convenient way for students to access their money when they need to make purchases. “

How can my bank/credit union help me manage my family’s budget?

Sousa: “Using an online personal finance management tool, such as Mint.com, or Jeanne D’Arc’s Money Compass is a great way to build and manage your budget. These tools pull all of your accounts together in one place and present a snapshot of your finances. You can set savings goals, create a budget, view account balances, monitor spending and much more.”

Marsella: “St. Mary’s Bank offers a variety of resources to help individuals and families establish their budgets and stay on track.

1. Understand gross income (before all deductions) vs. net income (take-home pay). Always use your net income as the starting point for your budget because that is the actual amount of money you will have to spend and save. Avoid letting the larger gross income amount make you think you have access to more money than you do.

2. Pay yourself first. It is essential to make saving money a priority rather than what you do with any leftover money. Think of your savings account as a bill and regularly contribute to it each month. Set up automatic deposits into a savings account, and you won’t even have to think about whether to save or spend that money.

3. Learn to make wise money decisions. St. Mary’s Bank’s Education Center offers financial education classes that walk people through buying a first home, establishing and maintaining credit, protecting themselves from identity theft and scams, and even planning for the financial road ahead. These classes are free and open to our members and the public. Visit www.stmarysbank.com/events.”

What is the best way to establish money saving habits with my children?

Sousa: “The best way to establish money saving habits is to start young — the younger the better. Just like brushing their teeth, or doing their homework, putting a portion of your child’s money into a savings account should be expected. What is equally important is looking for everyday teachable moments, such as a trip to the grocery store, to begin forming your child’s behavior toward money. Teaching them to save for something they want; to share by buying something for a friend’s birthday; and to spend wisely, are all important concepts in forming healthy habits. At Jeanne D’Arc Credit Union we help our youngest members save by visiting their schools and collecting deposits directly from the children. They receive a small prize for their deposit and by visiting on a regular basis. They develop the habit of saving.” 

Marsella: “Children often model their parents’ behavior, so parents who manage money responsibly play a pivotal role in their children’s money habits. Here are three additional tips to help you establish healthy money habits with your children.

1. Teach them how to earn money by giving them chores and paying small amounts for a job well done.

2. Show them how to organize their money into the categories of spend, share and save. Spend money can be used right away; share money is set aside for gifts or charity; and save money is put away for future large purchases.

3. Check in with them frequently to talk about how well they are saving toward their goals.”

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