One of my goals for the next month is to post each day of July about a List of 10 dealing with a personal finance or money saving idea topic.
Use real world experiences to teach your kids about money, such as trips to the bank, store and dining out.
1) At the bank explain to your children how to make a deposit, set up a savings account and checking account and explain about interest rates.
2) At a store, explain that when using a check or debit card, you need to have the money in your bank account to cover the expenses.
3) At store or restaurant explain that taxes and tips are added to the cost of the item
4) For teenagers, determine how much you are planning on spending on clothes and other items and give them that amount of money once or twice a year. Let them make decisions and see how far the money will go.They will see that they will need to make decisions on what they can afford to buy.
5) Explain how credit cards work and that you are charged interest each month on the amount that is owed. On a recent TV show an 18 year old had $15,000 of credit card debt. She said she thought it was “free” money and could be paid back any time she wanted to.
6) Explain taxes that are withheld from paychecks. Some think they will have the amount of their salary to spend.
7) Tell them what activities they want to participate in cost and determine if you need to cut some out.
8) Make savings goals for things they want to buy.
9) Determine the differences between wants and needs. Encourage them to think about spending decisions and to avoid making impulse purchases.
10) Have them separate the money they receive into different categories for saving, spending and giving.
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