Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
Most of us want our children to grow up to be responsible with money. Financial literacy is an important part of successful money management—if you start teaching your children basic lessons while they are young, they will have a firm financial foundation to build upon in the future. When brought up to know the value of money, children are more likely to exercise caution in their future dealings and be better at saving money.
Teaching basic money management concepts
Kids are visual learners, and it helps if they have something tangible to use when learning about money. Before my son actually began receiving an allowance, we had a system that allowed him to earn coupons that could be redeemed for TV time. Each DVD was labeled with a number indicating how many coupons each episode or movie required (single short episodes of a TV show cost only one coupon, while the longest movies cost four). He quickly learned that he could watch his favorite movie if he saved up his coupons for two or three days.
Basic systems like this translate quickly into an understanding of money handling. When we introduced an allowance, my son made the connection between coupons and money. However, he still needed to learn the value of money and how it was earned. I wanted him to earn money, but at the same time, I also wanted him to learn that some things are worth doing—even without pay.
Our compromise is to pay a small allowance that is not tied to chores (which he does because he’s part of the family) and to allow him opportunities to earn more money if he wants. As a result, he works hard to do well at 4-H projects to earn prize money, and he thinks of enterprises to undertake in order to earn more money. Allowing him to work for some of his money teaches him that it has value.
On top of this, I also teach my son basic money management concepts such as:
We use different jars and envelopes to teach these concepts so that he can see where his money is going. We also encourage him to rank the things he wants (sometimes using pictures he draws or cuts out of ads) so that he learns about priorities. He spends his money on the most important things first, and he forgoes the less important items.
Working with older children
As our son grows, we know that more lessons will need to be taught. If you begin when your kids are younger, it will be easier to teach more complex concepts later. One way to encourage pre-teens and teens to learn the value of money is to have them work for it. Jobs ranging from neighborhood babysitting and yard work to after-school employment at a local business can help kids learn the importance of work and provide them with money to manage.
It’s also possible to teach children concepts such as interest. Consider allowing your kids to borrow money from you if they ask for something they can’t afford. Explain that they will have to pay you back with interest—and that they can’t buy something else until the obligation is discharged. We tried this on my son, who didn’t want to save up money for a purchase. At first, he thought it was a great deal—until his money had to go to repaying us for the next three weeks and he saw that he had to pay extra back in interest.
You can also use the reverse to teach a lesson. Borrow money from your child and then repay it with interest. Show him or her that it is better to earn interest than to pay it. This can segue (for older children) into lessons on investing. There are a number of games online that can help pre-teens and teenagers learn about and practice concepts related to investing. These can help your child learn how to use money to make money.
Some additional ways to teach children money management skills include helping them open bank accounts, letting them make small mistakes with their money, and encouraging them to see that they can earn money on their own.
Miranda Marquit is a freelance writer and professional blogger specializing in personal finance, family finance and business topics. She writes for several online and offline publications. Miranda is the co-author of Community 101: How to Grow an Online Community, and the writer behind PlantingMoneySeeds.com.
The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.