The fundamentals of finance are part of the curriculum at just a very small percentage of schools. Using widely available resources such as books and the Internet, however, parents can put together an effective do-it-yourself course.
Lessons, activities, and responsibilities should be age appropriate, of course. A few tips:
*Give your children some money to budget. Experts differ on whether an allowance or regular payment for household chores is best, but kids should start early dealing with the concept that they have some money to spend and some to save.
*Let them know that they will be responsible for certain purchases and/or for some percentage of the cost of larger purchases.
*Teach them the basics of household accounting - how to balance a checkbook, how to read a bank statement, how to pay a bill. Some kids are amazed to discover that things as basic as electricity must be paid for!
*Teach them about interest. Show them how money grows when it's earning interest. As they get older, teach them the basics of other investments, such as stocks, bonds, and mutual funds.
*Help them develop good credit habits. Get them to understand the pitfalls of buying on credit, the dangers of making minimum payments, and the problems that can result from a credit card's high compounding interest rates.
(c) Copyright 1999. The Christian Science Publishing Society