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Teaching Finances to America's Future

November 4, 2011

Whether your kids get paid for odd jobs around the house or are already holding down a real job, it’s always the perfect time to teach them money management skills that will last a lifetime.

"It’s never too early to begin teaching children the basics of finance," says Tom Jaeger, Farm Bureau Bank's chief financial officer. "We encourage parents to expose their children to experiences like visiting a financial center, online banking, budgeting and paying bills."

Life’s financial lessons are best learned with through day to day experiences, such as:

• 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.
• At the grocery store. Explain the benefits of comparison shopping, coupons and store brands.
• Paying bills. Explain the many ways that bills can be paid: over the phone, paper or electronic checks. Discuss how each bill pay method takes money out of your account. Be sure to cover late penalties, emphasizing the importance of paying bills on time.
• 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.
• How to save. A financial rite of passage, opening a bank account for your kids will give them a sense responsibility and pride – especially when they experience the power of compounded interest first hand.

Children are quick to understand the value of money, so get them involved in your family finances now to give them the advantages they need to make sound financial decisions later. Here are a few websites that can help you and your kids get started on the path toward financial success:

• Tips and strategies for saving money: TeachChildrenToSave.com
• Basics about financial education: MyMoney.gov
• Open a savings or checking account online: farmbureaubank.com