I want to teach my 11-year-old about compound interest. Is there an easy way to illustrate it?
Compound interest is when you earn interest on both the money you’ve saved and the interest you earn. So let’s say you invest $1,000 (your principal) and it earns 5 percent (interest rate or earnings) once a year (the compounding ...
As young adults enter into their careers, talk to them about starting to save early for retirement and the importance of preparing for financial emergencies. Here are a few discussion points you can use. A great place to save and ...
When your son or daughter starts asking questions about credit, start the conversation with a talk about having a savings and spending plan then add the role of credit. Here are some topics you could consider discussing, and activities to ...
As children enter their teenage years, a key to developing a savings habit is learning that the sooner you start saving the easier it is can be. Here are some milestones and activities you could try with your teens: You ...
Ages 6 to 8 are a good time to discuss choices about how to spend money, compare prices, and start savings accounts. Here are some milestones you should look for and activities that can help your children reach them. You ...
My son just started his first part-time job. Can he open an IRA?
Your son or daughter can open an IRA as soon as he or she has earned income. There are two types of IRAs – the Roth IRA and the traditional tax deductible IRA. The basic difference is that contributions to ...
To talk with your teenager about her paycheck, start with the difference between gross pay and net pay. Then go over the various taxes and other deductions from her check. When she started her job, she filled out a W-4 ...
Be sure your children understand that credit is a loan – you have to pay the money back at a later time. If you don’t pay the entire balance in full every month, you’ll be charged interest. And the longer ...
For preschool and kindergarten aged children, money lessons should be fairly basic. We offer some milestones and activities to consider: You need money to buy things. Have your children identify coins and their value. Discuss how you may value ...
Talk to your kids about the dangers of entering any kind of personal information online. And tell them to never take pictures of debit or credit cards or post them on social media sites. Explain the dangers of entering any ...
When's a good age to open a savings account for my child?
Your child can start learning to save at a very young age. Consider opening a savings account for your child as soon as they save more in their piggy bank than you feel comfortable letting them have easy access to. ...
I want my children to learn how to compare prices. What are some things I could try?
When teaching children to compare prices, focus on both costs and benefits – that is, the best value, not just the lowest price. These are exercises you can make very simple for younger children and more complex as children get ...
Are there activities I could use to teach my child about needs and wants?
When trying to teach your children about needs versus wants, consider pointing out items like food and toys as you shop and ask them to tell you which category each fits in to. Understanding the difference between needs and wants ...
My kids are asking about whether to enroll in their employers’ 401(k)s, what should I tell them?
If your adult children are offered 401(k)s from their employers, encourage them to do it! The sooner they start learning to save for retirement, the easier it will be. Use the Compound Interest Calculator on the SEC’s website, Investor.gov, to ...
When we go shopping, how can I explain that we can't afford to buy all the things my children want?
When discussing what you can or can't afford with your children, start a discussion about one topic, like groceries, by explaining needs versus wants. Include your children in some of your buying decisions so they understand the choices you make. ...
To encourage your college aged son to start saving, suggest automated savings. If he has a steady income – from a part-time or full-time job, for example – he may be able to set up a payroll deduction from his ...
What's a good way to get my child in the habit of saving?
First talk to your children about needs versus wants. Once children understand that needs come first and that sometimes we have to wait for the things we want, it gives them a foundation to see the value in saving. Consider ...
I want to help my daughter start her credit history. What should I do?
To help your daughter start her credit history, start by ordering a copy of her credit reports from Equifax, Experian, TransUnion – the three largest national credit reporting agencies. You can order the reports free every 12 months at ...
How can I explain to my children where money comes from?
When you talk to a child that's three to five years old, you can explain that the money your family spends and saves comes from working. This may be hard for younger children to grasp, especially these days when most ...
A good way to start teaching preschoolers about money is have them identify coins and learn their value. Adults have a clear understanding that items in stores cost money, but put yourself in the preschooler’s shoes. To them, everything is ...
