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Your kids have pencils, notebooks, and backpacks. But are they really prepared for the new school year?

By Scott Biggs

If your child is not "money smart", he or she may not be ready for school. Children who do not have at least a basic knowledge about finances could struggle at school -- and at life.

It is never too early -- and it's never too late -- to teach kids and teens about money. It helps them become independent and thrive in the "real world."

Young children should know the value of coins and cash, and they should be able to verify that they are getting the correct change if they purchase something. Pre-teens should know the "value" of money, understand how to make and follow a budget, and they should learn responsible use of credit cards. Teens should know the basics of personal finance so they'll be ready to enter life on their own.

There are plenty of good books on the subject available at your local library, bookstore, or on websites like amazon.com. Chances are, you'll learn some things about smart money management as you teach your kids about it.

Money ABCs

Parents can help their children succeed this school year by providing them with some Money ABCs:

A. TEACH YOUR KIDS TO SAVE.
Saving money is the most important financial habit you can teach your child. Luckily, it is also the simplest. Every time your child receives money -- allowance, birthday, or earnings from a job -- encourage her to save part of it, either in a piggy bank or at a credit union. By doing this, you are establishing a habit as important as brushing her teeth or saying 'please' and 'thank-you'.

Setting financial goals is a big part of learning how to save. If your child wants you to buy him something, tell him that he'll have to save some of his own money to help buy it. Work with him to set a goal of saving $20, $50, or $100, depending on the cost of the object and his ability to earn money.

It is not the amount that matters, it's the habit of saving something. A Kids Club at a credit union is a great start. Most Kids Clubs and Teen Clubs require only $5 to open an account. Many times, these clubs offer additional incentives to save.

B. TEACH YOUR KIDS ABOUT CREDIT.
A record number of people are declaring personal bankruptcies because they have not managed their debts well (or they never learned the importance of savings). Teach your child to use credit cards and loans responsibly so they never get into debt trouble. By the time your child is in his late teens, credit card companies and lenders will start sending him credit offers. Make sure he is prepared.

C. TEACH YOUR KIDS THE BASICS OF PERSONAL FINANCE.
Many teens enter "the real world" without knowing how to write checks or find the best rates on loans. They need to know this "real-life" information. Let your kids help you pay some bills or apply for a car loan. They'll have to do it themselves someday. Are you preparing them for that day?

Kids Clubs make money lessons fun
One of the best ways to get kids started learning about money is to enroll them in a kids club or a teens club at your credit union. Most only require an initial $5 to start an account, and many credit unions offer fun gifts and contests throughout the year to encourage them to save money.

Many credit unions also offer fun websites for kids that teach money lessons with online games.

Your credit union also has information that will help you teach your child about money. So send your students back to school this year "Money Smart!"

Top 5 Personal Credit Practices
Kids aren't the only ones who benefit from financial education. Adults can take control of their money by learning about finances, too.

The U.S. Treasury Dept. and the Federal Reserve Board have listed the top five fundamental practices that consumers should follow to manage their personal credit. Many credit unions have staff members available to help you take control of your finances by following these 'Money Smart' practices:

1. Build savings to avoid high-cost debt and improve payment options.
2. Pay bills on time to avoid late-payment costs and poor credit ratings.
3. Pay more than the minimum payment on debts.
4. Comparison shop for credit and obtain only the credit you need.
5. Understand your credit history and how it affects you.

Free materials are available for Ohio teachers
Credit unions are not-for-profit cooperatives that exist under the common motto of "People Helping People." We see a lot of people in financial trouble and we want to prevent that by giving kids the financial tools they need to succeed.

Ohio credit unions are helping to make free classroom materials on financial literacy available to all teachers. These materials can be included as part of teachers' regular curricula in math, home economics, social studies, or any course where teachers are preparing their students to succeed in life.

Volunteers from credit unions across the state are also available to teach students about money or to assist teachers. Use the link in the green box at right to view this list.

Please e-mail the Ohio Credit Union League for more information.

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The Ohio Credit Union League, with offices in Dublin, is a state trade association representing more than 500 credit unions.  Credit unions are not-for-profit financial institutions owned and democratically controlled by their members.  Ohio credit unions provide savings, loans, and other consumer financial services to their nearly 3 million members.  To learn more, visit www.OhioCreditUnions.org.