Financial Savvy for School Age Kids from the Better Business Bureau
Finances and money management can be tricky at any age, but children can gain a lot of financial know how, with guidance from caring adults. As our kids prepare to head back to the classroom, your BBB would like to provide tips for building a financially savvy child.
For the Younger Kids
Discuss lunch deposits, budget together and review the records -Most parents place money into an account for students now, and students just enter a code when they get their lunch (much like a debit card). This can be helpful in that parents and students don’t have the worries of forgotten lunch money, but they also lose the benefits of a cash transaction at the register, such as making change, deciding if they have enough for extras, and cash budgeting for special days or treats (like popcorn days).
One tip for this group might be to discuss the amounts placed into the account and review the online records together frequently, budgeting for special items or events.
Consider an allowance or allow kids’ help with purchases -A small allowance and a little purchasing power teaches the value of money while demonstrating the benefits of saving. They can also become savvy shoppers through comparison shopping and learning about the benefits of coupons, sales, and seasonal purchases. If you add a cash transaction to the mix, they’ll also gain math skills and learn about dollar bills and coins.
For your Middle and High School Student
Provide the opportunity earn money- Consider giving your child opportunities to earn money so they can compare earnings to the cost of items. This will also encourage budgeting and saving.
Log it like an adult – Consider giving your child an empty check register where they can log their purchases and earnings, and if old enough consider checking and savings accounts of their own.
Help them look at statements, understand the concept of interest and fees, and become acclimated with financial terms, such as “debit”, “credit”, “compound interest” and others that will apply to their accounts.
Talk about living expenses and negotiating power: Discuss the amounts for normal expenses, such as water, gas, electric, phone and other charges occurred when living on your own. Also discuss which services and items can sometimes be negotiated to a better rate.
Before they leave home
Help them understand credit cards and debt- Help them understand the benefits and drawbacks of credit cards, debt, long term purchases and the “true cost” of items, purchased on credit.
For further tips, activities, and discussion points, check out the websites below: