As every parent knows, there are lots of things that you must start teaching your children about from an early age. These things include responsibility and accountability in how to properly spend and save money. It used to be this could be accomplished with a piggy bank and a purse or wallet. However, our financial world has become much more complicated and much more dangerous for the unprepared and irresponsible.
A great way to help your child learn about finances from an early age is to first of all talk to them about finances. They need to understand basic concepts of what money is, why it’s important, and how it should properly be used. In today’s world, teaching kids about finances also means that as they get older they need to become familiar with different types of finances. This includes cash, checking and savings accounts, credit cards, and loans. When children reach the appropriate age, ascertained by their parent, it’s a great idea to allow children to open a savings account with their parent’s assistance and permission. This can help them to start developing healthy saving habits.
Many parents are scared of the word credit cards, but kids need to be educated on how to use credit cards the right way. Credit cards are a very important tool in anyone’s spending habits today. Many items can’t be safely purchased over the internet without a credit card. This is why a great way to teach children about credit cards and their proper use is through a prepaid credit card. Your child can’t go over their limit, and you can teach them about how to use a credit card, when to use a prepaid credit card, and how to keep funds on the credit card. Education is the tool to healthy saving and spending habits.