Finance and Kids

In many instances when a child turns 18 and leaves home to go to college they realize that they don’t know much about finances.  They don’t learn about finances in school so it mostly falls to the parents to teach them the importance of managing their money.  Luckily, parents can start early when the child is young.  How early can you start teaching your child?  There really is no specific age however, the opportunity to teach about money can come as soon as the child first starts asking for toys.  Here are some tips to help teach kids about finances.

At the bank. When you go to the bank, bring your children with you and show them how transactions work.

On payday. Discuss how your pay is budgeted to pay for housing, food and clothing, and how a portion is saved for future expenses such as college tuition and retirement.

At the grocery store. Explain the benefits of comparison shopping, coupons and store brands.

Paying bills. Explain the many ways that bills can be paid: over the phone, by check, electronic check or online check draft. Discuss how each method of bill pay takes money out of your account. Be sure to cover late penalties, emphasizing the importance of paying bills on time.

Using credit cards. Explain that credit cards are a loan and need to be repaid. Share how each month a credit card statement comes in the mail with a bill. Go over the features of different types of cards, such as ATM, debit and credit cards

Allowance.  Over the past few years online banking for kids has become popular.  It allows kids to keep track of the money they earn.  With the help of their parents they can set aside money for spending, saving and charity.  No real money is ever spent without the final approval of the parents.  There are many sites that provide this service, some are free and others require a monthly fee.  Sites like Three Jars and FamZoo require a fee while Tykoon is free to use.