Daily Tips for Families

Today's Tip for Families

05-26-2023

Help Your Teen Learn About Finances Now

In a few years, today's teens will be responsible for managing all of their own finances. Learning about banking now will prepare your teen to manage money wisely later. It can also sharpen key math skills.

To boost financial literacy:

Challenge your teen to learn banking words. Does your student know the banking meaning of principal? (The amount of money deposited into a savings account.) How about the two meanings of the word interest? (The money earned from a savings account; the extra amount of money that must be paid back on a loan.)
Have your teen figure out savings interest. Give your student a pretend amount of money, such as $500. Then, have your teen check the newspaper or online to find the savings interest rates different banks in your area are offering. Ask how much interest the money would earn in a year at each bank. Which one would your teen deposit the money in?
Have your teen figure out the cost of borrowing. Pretend that your student will borrow $10,000 for home improvements. Again, have your teen research how much interest banks would charge for this type of loan. (It’s called a home equity loan.) How much would your teen have to pay each bank after five years? Which bank would charge the least?
Talk about credit cards. Explain that some credit cards charge 20 percent interest or more. Have your teen figure out the cost of carrying a balance of $500, for one year, on a credit card that charges 20 percent interest. Your student may be shocked on finding out how much extra money this is!

Brought to you by:

Willingboro Public Schools

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