No child is too young to learn that the key to success in life is knowing how to save the money you make. Start off as early as kindergarten by buying your child a piggy bank. Today such banks come in all shapes, sizes, and colors. Make the process of saving even more fun by purchasing a bank that appeals to your child's particular interests.We can treat money like a burden, or we can wear our financial lives in hip-hop style - loose and free - and have fun. I believe in hard work, but I also believe in fun! Make it fun for your child to be a smart, happy saver.
Your family financial summit is the perfect time to explore what a savings account is all about. Even your kids can open a no-fee savings account . . . for just $5. Help your children understand what banks do, because banks play such an important part in all of our financial lives.
Remember: the key is to make it fun. Before your family financial summit, you may want to plan a field trip to the bank with your children. Although television has familiarized most children with the large vaults and other security measures found in financial institutions, seeing how these work in person can have a tremendous effect.
If you have a safe deposit box, access it that day to show them both how you protect your valuables and how the security measures at the bank work. Make a deposit or withdrawal with a teller so that they see how they can access their money whenever they want. At the next summit, have your children bring a bunch of toys - dolls, baseball cards, stuffed animals. Give each of those toys some Monopoly money, and choose an object (such as a shoebox) to act as a bank. Your kids are now going to become knowledgeable about the banking system.
Explain that it's not wise to keep all of our money in the house. First of all, we might lose it, or it might be lost through no fault of our own - a fire, a robbery, or even an accidental swish of the vacuum. Make clear that money left around the house can sometimes disappear.
Describe the concept of interest. Tell them that the bank will actually pay them for holding their money over a period of time. Although the amount may not be a lot, it's certainly more than what your house would pay them! Then let each of your children's toys act as depositors in the "bank." Show your child that if a teddy bear puts $100 of Monopoly money into the bank, at the end of the year the bank gives Teddy the original $100 back - plus another $5. Show your children that the money is safe in the bank, and remind them of the security measures you saw during your field trip.
If your children are older, explain that a government entity called the Federal Deposit Insurance Corporation guarantees the safety of any money you put in the bank. If robbers come and steal money from the bank, theFDIC will give you back every dollar that you put in. (Unless your child's lemonade stand is about to be franchised, you don't need to mention that the cap is $100,000.) If the bank burns down, the FDICwill make sure thatTeddy gets back his money. If your children are a little older, you can go into more detail about banks and the FDIC. For those of you who need to brush up on your facts, here's some basic information to get you by.
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1. Teach your children how to relate to money in a positive way
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