There's not a lot of information available that speaks on how to properly talk with your children about finances. And that challenge becomes even more difficult if you feel, as an adult, not properly trained to teach your child.
Teaching your children about finances can actually be accomplished at a very young age. Whenever you are shopping and buying goods you can discuss money – how much things cost, how the store pays wholesale and charges retail, how you pay for goods, and even why you get change back from the teller.
I have a memory when I was very young and my mother buying groceries. It was the first time I noticed she handed the clerk a single bill and received several back. With that we walked out of the store with our goods. It seemed so innocent and easy at the time. Little did I know my mother probably paid with a $20 and got ones and fives in change back.
One great idea is to ask your bank for free check registers. Very often you can receive those for free or there may be a nominal cost.
With a blank check register in hand ask your child to play "store". Using monopoly money ask them to hand you (as banker) a $100 play bill. Then show them how to enter $100 into their check register for a beginning balance. Use sticky notes to put prices on their toys and have them buy toys out of their own bedroom. Then show them how to deduct the cost of the toys from their own play check register.
This teaches them about money, finances and even how to balance a check register. Of course, as their "fake" balance gets low you will have to caution them to not run out of money (maybe a good time to discuss chores to earn more money).
Another wise idea is to have them accompany you to the bank or credit union and open a savings account. Every time they receive birthday or Christmas money require they deposit half into their savings account. The key is to make them accompany you to the bank or credit union. Let them see the deposit slip and soon they will understand about saving money as their balance grows.
Be sure to explain that the bank uses their money to loan to others. In return, the bank pays them interest on their money deposited.
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