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Financial Literacy and Teaching Kids About Money
Financial Basics

Financial Literacy and Teaching Kids About Money

Children carry early memories with them throughout their life. Therefore, it is essential to teach them about money from a young age. Keep lessons simple and relevant. Real life examples help children internalize how money works. For example, if you use your credit card to buy your child a toy, show them the bill when it comes, to help them understand that nothing is free. Let there be no confusion in their minds that a plastic card can buy them toys!

Here are simple concepts to help kids build a healthy relationship with money:

  • What is a want versus a need? Good financial decisions start when children learn the difference between necessities (clothes, food, computer for school) and things that are nice to have (toys, books, electronics).
  • Teach kids about opportunity costs. Investing your money in one area costs you an opportunity in another. You can conduct this lesson in the grocery store. Give children a budget of $10 and ask them to decide how they will spend their money. For example, do they want to buy their favorite fruit or ice cream?
  • BLS Career Page for Students: By exploring careers and watching videos about different jobs, students can learn how their efforts translate to money and how it impacts their everyday lives.
  • How credit works. This is a big one. If you showed children the impact of using credit cards, you might save them from learning this lesson the hard way. If you use your credit card to make a purchase, explain to them that you are only buying time and will eventually have to pay the credit card company. Not all credit is bad and teaching kids how it works gives them the knowledge they need to make smart decisions.
  • BizKid$ highlights young entrepreneurs and inspires children to run their own businesses one day. The site includes links to a series on finance that has games, info, and other tools to learn about money.
  • How money grows. With companies such as Stockpile, you can help children make investments in $5 increments.
  • How money works. You can explain the family budget to children. This gives them a realistic view of what it takes to fund a household.

 

Showing Kids the Ins and Outs of Banking

Few things will impact your children more when they grow up than their personal bank accounts. Learning how to manage money starts with understanding where to keep it and how to make it grow.

There are several ways that Border Bank can help you teach your kids about banking. From explaining how your checking account works to opening savings accounts for kids’ wants and needs, you can involve children in monthly accounting tasks that impact their lives.

Tips for turning your banking accounts into financial literacy lessons:

  • Open a savings account for kids. Open a savings account and take your child with you to the bank to make a small deposit every week. Then, show them how to check the balance online. Use the account to teach your children about earning interest or saving for large purchases.
  • Teach your children how checking accounts work. Use your Border Bank checking account to develop age-appropriate lessons for your kids. For example, you can show children how the balance goes up when you make a deposit or down when you pay a bill.
  • Business checking accounts. If you own your own business, teach your kids a little bit about how finances work in a commercial setting.

Contact Border Bank today for information on how to set up savings and checking accounts for kids and how to manage your banking online.

 “Financial education is more valuable than money.” ― Mac Duke

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