Children and Banking: Making Sense of Cents

by Washington Federal Team on October 3, 2012

It’s not always easy to understand financial concepts. For children, it’s often difficult to make sense of cents.

That’s why some parents are choosing fun methods to teach their kids about money. Here are a few creative ideas to help your child understand the value of a dollar.

1) Create a home bank.
If you give your child a choice between reading about finances and Spongebob, odds are they will pick the cartoon. You can make a learning experience more interactive by creating a “home bank”. Help your child understand the value of saving and how interest works with these few simple exercises.

  • Suppose they want to buy a new toy, but don’t have the money needed for the purchase. By saving their allowance and drawing interest from your home bank, they could afford it in a month or two. Your child will soon understand how simple and effective saving money can be, especially if they make more in the long run.
  • A popular new game is hitting store shelves, but your child is short by $10. If your family bank lends them money, the remaining debt could be paid in additional chores. Your child’s spending habits will likely improve as they learn the true cost of discretionary spending (and the consequences of carrying heavy debt).

2) Learn with snap!
snap! is an easy-to-use, free of cost, personal finance management (or PFM) tool exclusively from Washington Federal. It’s simple enough for the whole family to use. Your older child or teenager can learn more about money with snap!’s budget application and colorful, visually stimulating graphs and pictures. With snap!, everyone in your home can get a better idea of where the family’s money is going and how to budget.

3) Budget on the go.
Trips to the store can be cumbersome if your child becomes bored. Keep your child’s interest by involving them in the shopping process. Here are a few ideas to get started:

  • Turn a grocery store trip into a lesson on finance. If they want a snack, give them a budget and let them decide (within reason) what to buy.
  • Shopping at a department store? Have your child help you find the least-expensive items. Not only is this an excellent exercise in financial awareness, it may help you find an overlooked deal.

How do you teach your children about money? Tell us on Facebook!

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