Teach Your Children The Financial Skills They Need

By Mike Wayman

Children do not understand how credit cards work. When parents use a credit card to pay for something it can appear as magic to a small child and the concept of what money is can be beyond their grasp. As a parent, teaching kids at even a very young age about money can help them to understand and make good choices as they grow older.

Explain to your child how a bank account is something that you have to put money into as well as something you can take money out of. Show them that even though you pay with a credit card at the store, the bill doesn’t come until later for what you paid for.

Make the experience fun. Show them how you do your grocery shopping. Teach them comparison shopping and explain how you pay for it. This will make grocery shopping fun for them, and they will want to learn more about it.

Giving an allowance is an excellent way to teach kids how to save for something, rather than buying it now. Show them how they can save half their allowance for something, and spend the other half. Showing the benefits of saving money and how they can buy bigger purchases in the future will help them get past the need to buy something right now.