Personal Finance for Kids: A Starter Guide

Teaching kids about money is an integral part of being a good mom or dad and the piggy bank is a great idea to teach children the value of money. A research study indicates that money habits in children are formed by the time they are seven years old. If parents are arguing about money, children will notice that and setting a healthy example for kids is important. It is quite important to show children that every stuff costs money and small kids should understand that money is earned. Children knows how to capitalize on the impulse buy especially when it uses someone else’s money.

Children can setup a bank account as soon as they become teenagers and it takes money management to the next level. Starting a bank account will prepare teenagers for managing a heftier account when they become older. College going youngsters should be aware about alternatives like going to community college, going to an in-state university, working part time while in university, and applying for scholarships. It is important to teach kids the danger of credit cards and most teenagers of today make use of simple budgeting apps like Every Dollar. Parents can introduce their teens to the magic of compound interest at an early age and they should help their children to become entrepreneurs.

Introducing Kids to Safe Digital Spending

Starting up their own business is a great idea for teenagers of today and one of the very best ways to teach kids the value of money is to give them a chance to make money some of their own. It is a great idea to introduce teens to safe digital spending using financial tools like debit cards. Small children have grasped the basic concept of using money as a medium of exchange and parents can take their kids to a physical bank and allow them to deposit their money. Dad and mom can explain their kids that banks hold both hard currency and virtual money. Teenagers can setup a joint checking account and kids in elementary school should be ready to understand electronic spending.

Parents can explain their kids that ATM cardholders get a secret personal identification number that allows them to deposit and withdraw money. Teens can understand digital money and personal finance experts advise that teenagers can begin with a debit card. Interactive financial websites make talking to kids about money easier and more fun with games, activities and quizzes. A child’s money habits are learned by the time they reach high school and financial websites offer financial literacy in an entertaining way. Some of the best interactive financial websites for kids include The Mint, Practical Money Skills, Rich Kid Smart Kid, US Mint Coin Classroom, Sense and Dollars, and Warren Buffet’s Secret Millionaires Club.

Learning about Personal Finance as Early as Possible

Parents should teach children about opening a bank account, paying bills on time, managing a budget, understanding debt and saving money for retirement. It is important to learn about personal finance as early as possible and kids can learn important skills like budgeting, saving, investing and managing debt by learning personal finance early. A strong foundation of financial literacy will help kids make informed financial decisions throughout their life.