Teaching children anything can be a challenge. Even more so when it comes to teaching them the financial facts of life. To help parents, guardians and even grandparents raise responsible money-managers, FDIC Consumer News offers the following suggestions.
- If you expect your kids to become responsible with their money — and yours — practice what you preach. Serve as a good example of what it means to save, spend wisely and share with others.
- So, take your child along on shopping trips. Discuss what makes some items “too expensive” and others “good buys.”
- Also take your child to the bank. Note the variety of services provided by visiting different departments of the bank. Explain basic principles, such as how money deposited in insured accounts is protected by the government against loss.
- Around the house, let your child help with simple tasks associated with preparing deposits or investments, or balancing the checkbook. As you pay your bills, especially the ones for your credit cards, explain how debts must be repaid on time or you can face additional fees and have trouble getting a good loan in the future.
- Also discuss your charitable contributions and why you are making them. Ask your child for input on which charities to support. He or she also can help you prepare contributions, even if just by stuffing checks into envelopes.
- Help your child start a savings or investment account. Young kids will enjoy saving money in piggy banks, but at around age eight, think about helping them open a small savings account. That way they also begin learning what banking is all about. If you want to know about our bank’s savings and investment programs go to TheRealPeoplesBank.com, or you may call our Customer Service center, 877.802.1212 (between 8 am and 7 pm, Monday – Friday) to get more information.
- Reward good deeds. Many parents reward their children for sticking to a savings plan by matching or adding to what the child contributes.
- Give an allowance. If used as a teaching tool and not a giveaway, an allowance can be one of the best ways to teach kids, even as young as five or six, about money management. It also allows children to experiment with money management and learn from their mistakes without losing too much in the process.