6 Techniques to Educate Your Children About Money

6 Techniques to Educate Your Children About Money

by | Apr 26, 2023 | SAVE MONEY

Children can benefit from financial education at an early age. Researchers share it’s crucial to start primary finance education by age 3. A study from the University of Cambridge, “Habit Formation and Learning in Young Children,” found that money habits are formed by age 7.

Children pick up money habits quickly, so giving them the right direction is crucial.

  1. Start with basic currency literacy. A study from Yale University found that children can recognize and remember coins by age 3.
  • Educate your children about the different coins and dollar bills.
  • Consider teaching them about foreign currencies during vacations. This will expand their minds and help them learn more about the countries you’re visiting.
  1. Create money jars. Money jars are a fun and easy way to educate your child.
  • You can create three types of money jars for spending, saving, and giving, covering the fundamental lessons of understanding how to use money.
  • Teach your children the three jars and why they’re essential.
  • Use the jars to separate money after birthday gifts or allowance payments. Children will learn how to save for the future.
  • Use the giving jar for charities. Children will learn about giving and understand how they can help others with their money. They can donate the funds to local animal shelters or food pantries.
  1. Use coupons. Coupons can provide an essential lesson on saving.
  • Cut coupons with your children’s help and leave them in charge of handling the papers at the store.
  • According to the Children’s Financial Network, kids as young as five can benefit from learning how to use coupons in a store. They will see how to save money and make wiser shopping decisions.
  1. Set a money goal. Children can set a money goal to purchase a favorite toy or other item.
  • Money goals are an easy way to teach children financial patience. They also provide a lesson on how to save money.
  • Setting realistic goals is essential, so children will be motivated to stay on a savings plan. If the toy they want is expensive, reaching their goals can take a while. Will they stay interested? Picking smaller and less costly targets is better.
  1. Go shopping. Let your children use their spend jars at the store to make purchases.
  • How will your children spend their money? Will they use their entire jars at one store or spread them out over many shopping trips? Shopping provides an easy lesson setting.
  • An outing to the local toy store also lets you discuss comparison shopping. Point out different prices on similar items and teach your children about finding inexpensive options.
  • Evaluating the results of the shopping trip will help them understand their choices. How will they restock their spend jars?
  1. Use yard sales. Yard sales offer another way to educate children about finances.
  • Yard sales can help you clean out your children’s rooms and teach them about money at the same time.
  • Ask your children if they want to participate in the yard sale by selling their old toys or clothes. Help them select items they no longer use and find reasonable prices. They can use the experience to refill their money jars.
  • Older children can help sell items at the sale. They can keep track of change and watch customers. This is also a valuable opportunity to learn about price negotiations with customers.

Finance education can begin before your children are in school. They need to understand basic money rules and form the proper habits.

4 Methods for Eliminating Overdraft Charges

4 Methods for Eliminating Overdraft Charges

by | Feb 22, 2023 | SAVE MONEY

Overdraft fees can be real killers. To add insult to injury, you’re charged a considerable amount of money as a penalty. You likely already have some financial challenges to get into that situation in the first place.

Banks are growing more reliant on these fees. These fees account for over $32 billion in bank income each year.

Banks have software that maximizes your overdraft charges. Imagine having $100 in the bank and two outstanding checks for $200 and $50. If both are payable around the same time, the software will ensure that the $200 check gets paid first. That way, you’re overdrawn twice.

While many banks offer overdraft protection, this is rarely the answer. Those that overdraft frequently would save money by paying the overdraft fees rather than opting for overdraft protection.

Try these strategies to eliminate or reduce your overdraft charges:

  1. Use a credit card instead of a debit card or check. This method is not without risk. It requires you to keep track of your spending and be disciplined to avoid overspending. This method can be dangerous if you’re unwilling or unable to control your spending.
  • With this method, you only need to write one check each month. That makes it challenging to be overdrawn.
  • You can enter your credit card purchases into your checkbook as if you had written a check. This will help to control your spending.
  1. Keep some extra money in your checking account. This is similar to stashing an additional $20 in your car for emergencies. Many people avoid overdraft problems by keeping extra money in their checking accounts. This can also help to stay above the minimum balance required to avoid unnecessary fees.
  2. Use online banking systems to stay on top of your balance. Most banks today offer many alerts to keep you updated with your account balance information. You can check your pending payments at the end of each day and make the necessary corrections.
  • Many accounts will allow you to set up low-balance alerts.
  1. It’s challenging to be overdrawn if you never use a check or debit card. You can only be stretched by withdrawing a little cash. The bank won’t let you have it.
  • Use cash for your day-to-day expenses. You can pay your bills with online banking, but a better alternative might be to pay your bills with money orders. Your bank can provide you with a money order, but so can your local post office. These typically aren’t free, but it’s a sure way to avoid being overdrawn on your account again.

Overdraft fees can create a tremendous financial challenge if you’re already struggling. Those with at least one overdraft pay an average of over $250 in overdraft fees each year. You can find something better to do with that money than give it to your bank!

Responsible banking is simple, yet many people need help managing it responsibly and effectively. Always know how much is in your account and track your spending. You may need to review your balance and spending daily. Develop a plan that works for you. Follow one of these strategies or come up with your own.