Teach Children to Understand Money by Acting Like a Bank

You probably don’t want your kids to always think of you as a mom and dad bank, but when your kids are young, acting like a bank can teach them valuable lessons about interest, debt, and other monetary matters.

Forbes offers several examples of real-life lessons that can be taught to children around the age of eight. For interest, for example:

Interest has two sides: it is either what you pay when someone lends you money, or what you earn when you lend money to someone else. Elizabeth Grasl, vice president of Prosperity Bank, says you will receive interest if, for example, “your sister runs out of benefits but needs money this weekend. You could give her a loan of $ 20, but charge her $ 2 in interest, which she will have to pay you next week. ” You can also turn it into a game to illustrate how it works: ask to borrow a few dollars in your child’s piggy bank, and then make a schedule to pay them back over the next month with interest.

Likewise, if your child really wants something in the store and has no money, you can let him borrow money from you on credit, and if he doesn’t pay it back immediately, start charging interest.

They also suggest taxing their benefits and putting money in the bank for family expenses, but you may want your kids to enjoy their childhood without being taxed too much.

11 Financial Words All Parents Should Teach Their Children | Forbes


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