Friday, June 22, 2012

‘20 things kids need to know to live financially smart lives

I’m not a parent, so I can’t speak from personal experience when it comes to teaching children about the value of a dollar. As a person with parents, however, I can honestly say that many of the lessons my parents taught me about money are now on my mind regularly as I adjust to a financially independent life as a bond insurance professional.
As parents, I know that my mom and dad wanted to help pave my road to success as much as possible, and I hope to be able to teach my future children about the importance of money management in the same manner. When the time comes, these are the financial lessons I want my children to know.
Ages 3-5
Once children finish kindergarten, they should understand the following about money.
  • You need money to buy things.
  • You earn money by working.
  • You might have to wait to by something you want.
  • There’s a difference between things you want and things you need.
Ages 6-10
Once children finish the fifth grade, they should understand the following about money.
  • You need to make choices about how to spend your money.
  • It’s good to shop around and compare prices before you buy something.
  • It can be costly and dangerous to share personal information online.
  • Putting your money in a savings account will protect it and pay you interest.
Parents, whenever you decide that it’s time for your child to have a savings account, make him or her an active part of the process. Instead of depositing money for your child, take him to the bank with you so that he begins to understand how saving money and the banking system work. Set up online access to the account so your child can see his or her money increase over time. The more involved they are in the process, the more children will want to save money.
Ages 11-13
By the time your child starts high school, he or she should understand the following.
  • You should save at least ten cents per every dollar you receive.
  • The more personal information (bank accounts, credit card numbers, social security information, etc.) you enter online, the more at risk you become for identity theft and other problems.
  • The sooner you save money, the faster your money can increase from compound interest.
  • A credit card is like a loan. If you don’t pay your bill in full each month, you’ll be charged interest and owe more money than you originally spent.
Ages 14-18
By the time your child graduates from high school, he or she should understand the following.
  • It’s important to look at all costs (tuition, room and board, books, student fees, etc.) when comparing colleges.
  • You should avoid using credit cards to buy things you can’t afford to pay for with cash.
  • Your paychecks might seem smaller than expected because money is taken out for taxes.
  • Many jobs offer 401k and other investment plans to help you safely save money for the future.
Ages 18 and Older
Once your child attends and graduates from college, he or she should understand the following.
  • You should use a credit card only if you can pay the owed amount in full each month.
  • You need health insurance.
  • It’s important to save at least three months’ worth of living expenses in case of an emergency.
  • It’s important to consider risks and annual expenses when investing.
Any healthy habit is best learned at a young age, so it’s never too early to begin teaching your child about the value of a dollar.
Sara Aisenberg graduated from the University of North Texas in December of 2011. Just a few months later, Sara landed a full-time position as the executive writer at, one of the nation’s leading surety providers.

1 comment:

  1. I love to visit this again and again. Lots of great information and inspiration, both of which we all need
    chemical business