Learning to manage your money should start when you’re at a young age. Learning to save money most times begins when the child starts kindergarten. Most schools now have credit unions or banks that come to the school once a month. The bank signs each child up for a savings account and gives them a log book in which the bank enters in their deposits.
Children are taught to watch their savings account grow. Granted this should start at home, but some children do not have this privilege. The children whose parents are keen on finances work with their child and reinforce earning money for chores done and putting a percentage of their earned money into the savings account. The parents work with the bank coming to the school.
Learning to save money is the first step in learning to manage money and pay bills as the child becomes an adult. When a young person starts life on a sound financial foundation, this young adult learns how to,
- Budget money
- Consolidate debt with a personal loan
- Become aware of good credit and when credit needs help
- How to monitor credit reports and ratings
- What bearing credit reports and ratings have on their purchase power
As the young adult ages, they learn through experience what it means to bank at a bank versus a credit union, obtain a secured loan versus an unsecured loan, credit cards, and rates of interest. Indeed, there is a lot of things in the financial arena for an individual to learn about and be aware.
Learning about healthy money habits becomes more difficult when parents did not take the time to teach the child about how to handle money and save money. Saving money is the foundation for good money management, instilled in children at a young age that forms healthy money management as the child becomes an adult. Bad habits are easy to develop, and harder to eliminate.
We know as adults that when we deposit money into a savings account, the bank will give us our money back anytime we ask for it. When a child deposits (gives to strangers) their hard earned money, they sometimes do not comprehend if they will ever see that money again. Putting money into a savings account is the foundation of the learning process by which most of us handle our finances later on in life. Some people never learn the concept of saving money, and this is an unfortunate situation but not the end of the world. Today, there are new financial opportunities with loans for people with bad credit. Click to learn how you can qualify!