What your children need to know about money

High schools around the country are doing a much better job of providing financial education to students, but the best teaching still occurs in the home. You can start with a simple piggy bank and show your little people how to set a goal and then save to achieve it. By the time they get to grade school, children should understand these basic principles of saving and spending, but they also should begin to understand what it means to invest money in something and how and why people borrow money. Teach them about income and why a good education and training can lead to more. Children should learn how to count money, how to budget, why you should try very hard not to spend more than you make. In later grade school years you can teach them how to manage a credit card and why adults need insurance. By the time they get to middle school your kids are ready to learn about the stock market and how interest rates and inflation affect the value of money. It might be fun to pick out and track a few stocks with them and show them how they can take financial risks to make money. Middle schoolers already experience sales tax, so you can start talking to them about property and income taxes and how to factor them into your purchases and financial goals. Revisit as often as you can the idea of making and keeping a good budget plan and how to avoid paying interest rates and late fees. Talk about insurance and why people need to protect themselves. By high school, many students begin receiving a paycheck, which is an excellent opportunity to drive home the impact of taxes and Social Security on income.  Many will also be planning to apply for college and that process also offers a very necessary opportunity to discuss loans, interest rates, budgeting, and your… | Read More »