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If you have children, then you are being watched every time you make a purchase. They see you swipe that plastic card and voila! You own something new! Children see this and they get excited and they now want a plastic card. They also see parents going to an electronic box, insert the plastic card, punch a few numbers, and WOW money comes out! Ever heard of the game Mall Madness? See these old games like Monopoly being revamped to include plastic cards? It is everywhere. But do children understand how credit and debit really works? Taking the time to explain how these cards work to a young child is very important because you want your child to grow up financially smart.
You should clarify to children that when you swipe a credit card at a store, a statement will arrive in the mail that says it must be paid back. Also, inform them that an ATM is not a device that is simply providing complimentary money, but rather the currency actually comes from a bank account you have built up by working for a paycheck that is put into the bank account.
Experts have suggested various ways to help kids comprehend the basics of credit cards, Internet banking, and ATMs.. Teaching your children how a credit card works, the value of a dollar, how to put away money in a saving account, and be responsible with money from an early age can help guarantee that they thrive financially and build wealth throughout their lives.
Before you go to the store, get a balance receipt from your bank. Bring your child to the grocery store. This is a good way to help them to begin thinking about how to be a smart shopper. Allowing your child to help you find items from a list gives them the opportunity to learn and recognize numbers and comparison shopping. Explain while the item is being scanned in checkout that the computer is tracking the prices of each items and adds it up. Then when it is time to pay for everything, let your child swipe your card. You can highlight the fact that this card knows how much money is in your special account. After you are done shopping, go back to the bank and get a balance receipt and compare the two.
Providing your child with a savings account can give them a sense of responsibility as well as teach the importance of adding, subtracting, and keeping an accurate log. Download an inexpensive program like Quicken on your computer. Assist your child in setting up their own account information. Then you can make small deposits each Friday and give them the bank receipt. When they go home you can assist your child in updating their computer banking program. Once a month you may allow your child to withdraw a small amount to make a purchase. Let them update their computer banking program. This ill prepare them for debit cards as they get into high school.
