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Janice France-Pettit: Preparing your children for their financial future

Union Bank

Posted: April 9, 2010 10:58 p.m.
Updated: April 10, 2010 4:55 a.m.
 
Raising kids who manage money and finances in a smart way may be an important goal for your family. With a little planning, you can incorporate financial lessons into daily activities and make learning about money fun for both you and your child.

Here are some tips to help parents and other adults instill responsible spending and sound saving habits in children of all ages.

Preschool years
Preschoolers can learn basic ideas about money. You might introduce them to coins (assess if your children are old enough to understand not to place the coins in their mouth) by pointing out the names, sizes and colors of different coins.

Some younger children may have a growing awareness that money is used to buy items, and playing games such as "restaurant" or "grocery store" may help demonstrate how money is used. Use their new-found awareness as a starting point to explain the financial decision-making process and stress that money is not limitless (it really does not grow on trees) - a life lesson most of us were taught at a very young age.

Early school years
Start to reinforce what your children are likely learning in the classroom - counting and differentiating between coins and paper money. Introduce the importance of saving, and have your kids collect money in a "piggy bank" or other collection item. (Some toy stores even sell ATM machines for kids that will track deposits and withdrawals.)

Consider taking regular trips to the bank to deposit the money to help increase your children's awareness of the value of saving.
If you wish to give your child an allowance, this can also be a lesson in spending and saving. Bank accounts and check writing may also be something children are curious about, and you might consider discussing these topics with them as well.

Consider opening a basic savings account in your child's name. Many banks, including Union Bank, have accounts specially designed for kids that will help teach children the rewards of saving money and how it may fund longer-term purchases.

Teen years
Teens may wish to make their own choices about how they save and spend, but they still need parental oversight to make sure they are making smart decisions.

At Union Bank, we offer teens a Teen Savings account that enables them more access to their savings accounts with an ATM card and also gives parents 24/7 online monitoring. When your teens are ready for even more independence and responsibility, consider a bank account with a debit/ATM card, free online banking and bill pay.

College years
Hopefully, by the time your children enter college they will understand the value of saving and spending wisely, but college can be a tempting time for many students to spend beyond their means with credit cards.

While the new credit card rules prohibit card issuers from marketing credit cards to college students on or near the campus of an institution of higher education, many college students still have access to credit cards, often with high spending limits.

Educating your adult children about credit cards and how to avoid credit card schemes or false promotions may help encourage them to make better financial decisions.

The lessons you share and the examples you set for your kids early in their lives will be the foundation for their financial futures.
The foregoing article is intended to provide general information about foreign-exchange strategies and is not considered financial or foreign-exchange advice from Union Bank. Please consult your financial or foreign-exchange adviser.

Janice France-Pettit is a senior vice president and regional manager for Union Bank, overseeing the Simi Valley, San Fernando Valley and Antelope Valley regions. Her column reflects her own opinion and not necessarily that of The Signal.

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