Kids & Money: Beyond the Piggy Bank
Usually when we think about kids and money we envision children running home with lose change and dropping it in their piggy banks. But when having discussions with kids about money, it is important to remember that children usually understand much more than we give them credit for.
Many times my clients come in with all kinds of fears and misconceptions about money that were passed on from their parents. Like with most topics, having an open and honest conversation about money can set children up for success in the future.
Here are some tips and topics to discuss with your kids or young loved ones at different ages and stages:
- How to count money.
- Saving and Investing : What is the difference?
- What is a budget? Why do we use them and how do they affect saving?
- Needs v. Wants
- Income: What are different sources of income?
- How do you earn money?
- What does it mean to have a job?
- How does education affect income-earning ability? What are your beliefs, as a parent, on education and career when it comes to financial stability?
- Borrowing: What does it mean to borrow money? What are the pros and cons?
- What is interest? (A good exercise would be to lend them a nominal amount of money and calculate interest on that money to illustrate the cost of borrowing money).
- How are time and money related? For many people that one dinner at a restaurant can cost 2 or 3 hours of of work.
- How to look beyond advertisements for information on prospective purchases.
- What is a credit score? Why does it matter?
- How do credit cards work?
- Functions of the economy, recessions v. expansions and how they affect us.
- How to develop a personal financial plan.
- Bank, Institution, and School Loans. plan.
- How do taxes affect income and vice versa?
- What is financial aid for school and how does it work?
- What is identity theft and what are some good practices to prevent ourselves from it?
- Different types of insurance. What are co-payments and deductibles?
- Living & Maintenance Expenses
- Association Fees
- Retirement and Life Insurance
- Lines of Credit
- Social Spending
If you'd like to read more, here are the links to the articles I used to compile this list together:
- What Kids Needs to Know About Money at Every Age
- Talk to Your Kids About Finances
- Money Basics for Kids & Teens