Parents and the dreaded “money talk” — How credit unions can help

In the realm of youth financial education, there is a common trend for institutions to focus solely on teaching kids directly, whether through school programs or youth initiatives. However, the role of parents in shaping children’s financial literacy cannot be overstated. Credit unions, in particular, have a unique opportunity and responsibility to include parents in the financial education conversation and provide them with the necessary tools and resources. April is Credit Union Youth Month and Youth Financial Literacy Month. The “Money Talk” is often a dreaded one among parents—here’s how credit unions can help.

The importance of involving parents

Empowering parents with financial knowledge and skills benefits families and future generations in two significant ways. Firstly, parents play a crucial role in shaping their children’s money habits and attitudes. Studies show that kids often imitate their parents’ financial behaviors and beliefs. So, when parents improve their financial literacy, they not only help themselves but also set a positive example for their children, influencing how they manage money in the future.

Secondly, providing parents with easy-to-understand and non-judgmental financial education resources made for their kids helps them identify their own strengths and weaknesses in managing money. This approach creates a supportive environment, especially when teaching kids about finances.

As providers of early childhood financial education, we often hear from parents who appreciate our programs because they learn alongside their children. This mutual learning experience not only benefits families now but also prepares future generations for financial success without leaving parents with the impression of being scolded for their own financial hiccups.

The deep impact of a financial literacy crisis

The state of personal finances among Americans is dire, which experts have attributed to a lack of financial literacy. According to a survey by financial services company Empower:

• Nearly 60 percent of Americans still rely on family and friends for financial support. Half don’t think they’ll ever be able to pay their bills without help.
• Almost three-quarters say they stress over finances at least once per month, and nearly 20 percent say they worry about money daily.
• 40 percent of Americans do not maintain a budget, and the same percent have less than $1,000 in savings.

A survey conducted by Penny Hoarder revealed certain correlations between those who did discuss money management at home and those who didn’t:

• Just 13 percent said money issues were discussed at home.
• Only 20 percent learned about the importance of credit scores.
• Nearly one-third of those who did not talk about finances at home earn less than $50,000 versus only 18 percent of those who did.
• 40 percent of those who did not discuss finances at home have zero savings compared with 20 percent of those who did.

The clear takeaway from these startling statistics is that letting kids go into the real world without teaching them critical money concepts could doom them to financial failure.

Why parents have difficulty teaching their kids about money

Unquestionably, many parents are perplexed by the issue of kids and money. Some find it difficult to discuss because they were never taught the principles of personal finance. Some aren’t comfortable discussing finances with their kids because of their own issues with money. Insecurity and lack of trustworthy tools seem to be the biggest deterrents.

Discussions about money must be based on habits and values that parents can demonstrate and reinforce by walking the talk. Especially as it relates to money habits, kids are on to the “do as I say, not as I do” reality of parenting. Even in the early years, kids are exceedingly perceptive and impressionable when it comes to parental habits, with a strong tendency to mimic them.

Beginning from the first time a toddler points to a toy in the toy store and exclaims, “I want that!” parents must use every opportunity to instill money concepts throughout their childhood. Before you know it, your kids are off to college, and the opportunity is gone. According to the Empower survey, nearly 60 percent of parents regret not having more money conversations with their children, and most would turn back time to do things differently and prioritize financial literacy.

Where can parents turn for help?

For parents who find it difficult to broach the subject of money with their kids, credit unions can be fantastic financial education partners for parents. By prioritizing parental involvement in financial education, credit unions can strengthen overall family financial health, foster intergenerational financial literacy, build trust and loyalty within the member base, and demonstrate alignment with credit union values of community support and member well-being. Here are some ways that this can be accomplished.

Financial education programs: Credit unions can provide workshops, online courses, and interactive activities designed to equip parents with the knowledge and tools to teach their children about financial concepts such as saving, budgeting, responsible spending, and credit. Articles that help parents determine whether to pay for chores, good grades or behavior are highly searched topics and clearly a space that parents hope to find resources.

Youth savings accounts: Credit unions typically offer small awards to children for making deposits into their youth savings accounts. While these awards are appreciated, imagine the power of also incentivizing parents in helping their kids make good money decisions. Perhaps families that regularly participate in youth savings deposits earn a better savings rate for themselves or a better loan rate on a car.

Family financial counseling: Parents are always looking for advice and resources to teach their children. Credit unions could offer financial counseling services tailored to parents, providing guidance on setting allowances, establishing savings goals, discussing debt management, and navigating financial challenges as a family unit. Again, these same tools, when put in the context of children can also be applied to parents, but the message feels less judgmental and often has a more positive and inspiring feel.

Online resources and tools: Credit unions can provide a range of online resources on their websites, including budget templates, money-saving tips, interactive financial planning tools, and age-appropriate articles, empowering parents with accessible and practical financial knowledge. The good news is that there are companies that offer all of these resources to credit unions.

My First Nest Egg: A turnkey solution for credit unions

One impactful way credit unions can support parents in teaching financial literacy is through programs like My First Nest Egg. My First Nest Egg provides credit unions with customizable materials and resources designed specifically for parents and children—including—a custom chore and allowance app, landing pages with articles, videos, and tools delivering expert advice. My First Nest Egg equips credit unions with colorful and fun tools for parents to help families have meaningful money conversations. In celebration of Youth Financial Literacy Month, My First Nest Egg created the My First Money Talk Toolkit for credit unions. This toolkit offers credit unions a branded package to help parents talk to their kids about money with an interactive map, worksheet, and parent guide. By prioritizing parental involvement in financial education with tools designed specifically for families, credit unions contribute to building stronger, more financially resilient communities.