If they are old enough to ask for a toy, your kids or grandkids are old enough to learn financial lessons. The best lessons are part of everyday experiences, such as those below. Be open and honest when you discuss your financial experiences-good or bad.
At the bank: Bring your children with you to the bank. Show them how transactions work. Explain how the bank operates, how money generates interest, and how an ATM works.
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 market: It's easy to give clear examples of "needs" and "wants" using different kinds of foods at a grocery store. Milk is a
need; soft drinks are a
want. Explain the benefits of comparison shopping, coupons, and store brands.
Chores and allowances: Assign chores and give them a monetary value. Discuss ways to budget and divide allowances. Encourage children to set a financial goal, such as saving for a bike.
Paying bills: Explain the 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. Discuss late penalties and how that impacts credit scores.
Credit cards: Explain that credit cards are a loan and need to be repaid ASAP. 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.
Planning a vacation: Emphasize the value of saving as a family. Set a family savings goal that involves your children. Determine the cost and discuss ways everyone can help to reach the goal.
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