The summer months mean many kids in America are working for some extra cash in their pocket.
Whether your child is doing odd jobs around the house or working at the local pool, it’s the perfect time to teach him or her financial lessons that will last a lifetime. Consider using that summer job money to help your child start a savings account or a checking account if he or she is old enough. This can help to teach how to budget and manage an account while he or she is still living at home. It’s never too early to begin teaching children the basics of finance, even before they get that first job. We encourage parents and grandparents to expose their children to experiences like visiting the bank, budgeting and paying bills.
Here are some examples of teachable moments to help you get started:
• On payday. Discuss how your pay is budgeted to pay for housing, food and clothing and how a portion is saved for future expenses such as college tuition and retirement. Help your child budget that first paychecks to suit current and future needs.
• At the grocery store, department store and other shopping trips. Explain the benefits of comparison shopping, using coupons and store brands. Explain the differences between needs and wants.
• Paying bills. Explain the many ways that bills can be paid: over the phone, paper or by check, electronic check or online transactions. Discuss how each method of bill pay takes money out of your account. Be sure to cover late penalties, emphasizing the importance of paying bills on time. Explain the value of saving and budgeting and the consequences of not doing so.
• Using credit cards. Explain that credit cards are a loan and need to be repaid. Share how each month a credit card statement comes in the mail with a bill. Go over the features of different types of cards, such as ATM, debit and credit cards.
• At the bank. When you go to the bank, bring your children with you and show them how transactions work. Ask a bank employee to explain how the bank operates, how money generates interest, how money is loaned out and repaid and how an ATM works. Open a savings account with your child and help him or her with the transactions and reconciling the account to the statement when it comes. Show them the interest earned and how deposits and withdrawals are tracked.
Information provided by Tim Esbeck, community president, Manufacturer’s Bank & Trust Clear Lake Branch, 1919 Hwy. 18 East, Clear Lake. For more information, call 641-357- 6161.