22
Economics
The CO-OP Country Round Up November / December 2020 Volume 21 Issue 1
How to Talk to Your Children About Money by Judy Baird, VP Branch Manager Mountain West Bank I don’t recall having conversations with my parents about budgets and household finances as a child. We just didn’t talk about such things. It wasn’t until I was on my own that I started to understand necessity of keeping track of my income and my expenses. Today, things seem to be much different. Here at the bank we have parents inquiring about adding children to checking accounts and asking for debit cards for them. We have children of all ages proudly coming in to make a deposit into a savings account and keeping track of the balance. A recent article from the National Financial Education Center states above all lessons, one of the best things a parent can do is to strive to model healthy money management behaviors with his or her finances. A mistake along the way, such as incurring excessive debt or failing to be on time with payments, can turn into opportunities to talk with children about financial management. Early childhood is the perfect time to talk about differences between wants and needs. Encourage your child to save money for things they want to purchase. Allow them to have some decision-making authority as to what to do with their money, helping guide their decisions but not necessarily making them for the child. Consider running your own “Family 401k” by matching every dollar they choose to place into a savings account with a dollar or two of your own. Some parents elect to set up a weekly allowance or reward them for certain chores. Start with a small denomination then increase it as your child’s responsibility level grows. Be prepared, however, for the conversation that may be needed when your child decides he or she would rather go without any money that week than having to do his or her chores. Middle childhood money management lessons could include setting up a bank account. Show your child how to make deposits and withdrawals and to keep a record of those transactions. When you receive the bank statement, go over it with them and see how it measures up with what was personally recorded. Around 8 and 10 or so can be the time to include your child in family budgeting decisions such as family vacation, entertainment, or shopping for clothing. Real world decisions can help them decide whether it’s more important to buy one expensive jacket or several discounted outfits that will last the entire school year. Introduce them to thrift shopping, a great way to feel the thrill of a great find or a super bargain. Preparing for future use of credit is a great discussion to have with adolescent children. They don’t need their own credit card and they don’t need to build their credit just yet, but they can build healthy credit habits by paying any bills or “loans” from a parent on time. It’s a good time to start establishing long-term goals. Work together to create a strategy for saving for a car, a school trip or even buying a home 10 years down the road. Older children can even enjoy learning about the stock market, picking a stock for a business in which they have interest. Tracking the stock’s performance can be fun and educational. Trips to the library or utilizing online resources can be options for exploring money management tools. I mentioned in a prior article the Financial Foundations education program on Mountain West Bank’s website www.mountainwestbank.com. At our website, under Education, the Financial Foundations Portal provides links to self-paced interactive game-based lessons for families based around character development, mental wellness, financial readiness, and career exploration. Beyond the program for families, there are also Financial Foundation portals with programs for adults, small businesses, students, and a credit builder program. Best of all, these programs are free. According to the National Financial Education Center, it truly is never too early or too late to have conversations about money with your children. The earlier the better for introducing basic concepts. Continuing these conversations as they grow help solidify the understanding of the importance of smart money management and good planning.
Christmas trivia: History of Christmas 1. What Christian group banned Christmas in Boston from 1659 to 1681? A: The Puritans Even though the ban on Christmas was lifted in 1681, Christmas didn’t become popular in Boston until the mid-19th century. Puritans also suppressed Christmas in England as well, during the Interregnum.
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