Teaching Kids About Money By Paying Bills

Teaching kids about money through a debit or a credit card would also be a great idea. Some kids don't realize the difference between debit and credit. When a debt card is used it's pulled from an account or funds that you may have placed onto it. When you use credit it is being borrowed from a lender and you are obligated to pay it back.

They should understand that you should always have funds in the bank. Just because you have money you should not go crazy and spend it all up you need to use it wisely. They need to think about what the consequences would be for spending up everything that they may have. Things such as someone's car breaking down.

Children should know that credit cards is the number one reason why people are in debt today. People go and apply for all types of different cards and max them out and then they are not able to pay the lenders back. Then there will be all sorts of debt collectors calling you. Parents need to try and pursue their children to stick with a debit card because it is a lot better.

You're not borrowing anything so you do not have to worry about paying any lenders back. You also have the option to have overdraft protection on your card if you have your card linked to your checking or savings account. This is so you do not go over the limit that you have, if you purchase an item for two dollars and there is a dollar and fifty cent on your card it will not let you use the card. You use only what you have.

This means no income at all with bills that have to be paid. Children do not consider these factors they only think about when the time comes for them to get their own place and being able to do what they want to do when they want. You can not stay in a home if you do not pay the rent. It is impossible to stay in a home without power this means no hot water and no lights to see what you are doing.

This may motivate kids and they will then want to add more funds often. The more they have in the bank the more interest they will have added on. This could get them on the right track early.

By: Shane Stowing

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Derrick Janson is an expert in Teaching Kids About Money . He has taught about teaching kids about money topics such as allowances, budgeting, saving money and making money for kids.