Financial education is often not covered in school, so it is essential that parents, mentors or care providers teach children and young adults how to manage their finances, so they are set up for success.

These are four basic concepts to start with when teaching financial literacy:

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Write a budget – Have teens write a budget for all their current expenses like gas, school supplies and entertainment. Doing this exercise and tracking all expenses can be very eye opening for many teens – it’s surprising how quickly things add up. Don’t avoid talking about alternatives. Just because you can’t afford the fanciest phone doesn’t mean you are out of luck. Help them find alternatives that still meet the same need but that don’t take up too much of their budget. Another lesson to cover in budgeting is to spend less than they earn. Tackling this basic concept will help them cover expenses, grow their savings and have some left over for fun things.    

Open a savings account – Learning to save from a young age is a keystone to financial literacy. Saving can help young adults make high-ticket purchases later down the line and provide them with a safety net in case they are faced with an emergency. Incorporating budget concepts and spending less than you earn will support good saving habits.

Learn about what a credit score is and how to keep it high – Teaching teens about credit cards is critical to financial health. Many teens may not have a credit card, but practicing or talking about credit is important. When teens do get a credit card, recommend that they pay off the balance every month or as quickly as possible and avoid opening too many accounts (have them start with only one). Building good credit will allow them take out loans in the future and foster financial freedom.

Gearing up for loans – Loans can provide access to college, a car or a house, but teens don’t often consider that loans can have a big impact and take years to pay off. Understanding interest rates, the length of loans and what income they may need to easily incorporate loan repayment into a budget are important factors to teach and consider before getting a loan.

Once you have discussed these tips with children at home, take them to a bank or credit union and introduce them to a financial expert. TruWest is a local credit union and provides expert advice and guidance on tools and services that may help teens becoming financial experts. To book an appointment, visit the TruWest site here.

Lisa Vega is a marketing strategist at TruWest Credit Union. TruWest Credit Union is headquartered in Tempe, Arizona, and operates as a cooperative providing its members with a lifetime of quality financial services and a culture of caring for its members, employees and communities. TruWest is a strong and sound financial institution with more than 96,000 members and assets totaling more than $1.3 billion. TruWest® Credit Union has 13 branch locations – nine in metro Phoenix and four in Austin, Texas. For more information, visit