Thursday, April 13, 2017

Financial Lessons To Teach Your Kids (Part 2)

Whether they pick up information from you, their friends, their friends' parents, their teachers, or TV shows, your children are guaranteed to learn about money from somewhere. As the parent, it's important that you proactively teach your children how to handle money wisely so that they are less likely to learn bad habits from other sources. Last week, our Lake of the Ozarks community bank discussed four important financial lessons to teach your children:
  • "Money has to be earned."
  • "You may have to save up before you can buy."
  • "You have to use your money for different purposes."
  • "Once you spend money, you don't have it anymore."

Each of these are important lessons that, once learned, will help guide your children on their paths towards becoming financially solvent adults. However, they aren't the only lessons your children will need to learn. Keep reading to find a few more important lessons to teach your little ones, courtesy of your friends at First Bank of the Lake.

"Your Money Should Always Be Working For You."

The piggy bank may work well for the first few years of your child's life, but once she gets old enough to understand the concept of depositing money into a bank, switch her savings over to a local bank at the Lake of the Ozarks. It's never too soon to start teaching your child the importance of letting her money work for her by earning interest in a savings account. Help her keep track of her account balance and be sure to point out the interest that she earns in the account. If she internalizes this lesson now, she'll be more likely to invest her money when she is an adult.

"You Have To Be Selective About Your Purchases."

Children have to learn that money is not limitless. It's important to teach them how to count the money that they have, and then translate that amount into the purchases they can afford to make. For example, let us suppose that your son has $20 in his piggy bank. He can buy two toys that are both $10, but he cannot buy two toys that are both $15. It's important to help him see that when he buys the $15 toy, he will only have $5 leftover. He'll have to save up some more before he can afford the second $15 toy he has his eye on.

Helping your child think through his purchases in this manner will help introduce the concept of budgeting. This is a critical lesson for children to learn at a young age, before they have access to credit cards. Credit cards make it easy to spend money that you don't actually have, which can make it tempting to be less selective about purchases in the manner we just described. Instilling this lesson in your child at a young age will help him be less likely to rack up expensive credit card debt. 

"Take The Time To Find The Best Price."

If your child sees a toy at the department store she wants, take the opportunity to teach about bargain hunting. Explain that before she buys the toy here, it might be smart to look for the same toy at a different store or online, since she might be able to find it for a cheaper price somewhere else. If she is able to find it for a lower price, she'll have more money leftover to buy another toy in addition to that one. 

Grocery shopping is another great time to talk to your children about comparing costs. As they get older, you can begin to introduce the concept of calculating the actual cost of items that are sold in varying quantities. For example, a single granola bar priced at $1.00 costs more per bar than a box of ten granola bars priced at $9.00, even though $9 is greater than $1.

Open Your Child's Bank Account At First Bank Of The Lake!

If you are ready to introduce your child to the concept of banking, consider opening a checking or savings account with First Bank of the Lake. Our community-centered bank is here to put your and your family's needs first. For more information about opening a minor checking account at the Lake of the Ozarks, give us a call at 573-348-2265.

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First Bank of the Lake - Striving For Excellence
Member FDIC. Equal Housing Lender.

Located at the entrance to the Osage Beach Premium Outlets!

4558 Osage Beach Parkway

Suite 100
Osage Beach, MO 65065

(573) 348-2265

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