CHICAGO, IL--(Marketwire - Mar 14, 2013) - As part of BMO Harris Bank's ongoing commitment to financial literacy and Making Money Make Sense, BMO Harris is providing weekly financial tips. This week's tip offers ways to teach kids ages 7-8 about money.
Kids are full of curiosity, so it's only natural this curiosity would extend to money and finances. As kids approach ages seven and eight, they are in full learning mode and are interested in becoming more responsible for themselves.
BMO Harris Bank recommends parents with kids in this age group start with these lessons:
Start saving. It's not uncommon for kids to receive money through either a small allowance or gifts, making it a great time to begin teaching the importance of saving money. Talk to your kids about what financial goals they have, such as buying a gift for a family member. Then, help them save small amounts of money toward it and track their progress. You may want to give a small reward each time a savings goal is reached.
After a larger amount is reached, you can go to the bank to open a savings account. Most kids think it's fun to come to the bank and for many of them it's the first time they've opened an account of any kind.
Learn the value of everyday items. Kids in this age group are ready to learn that everyday items, such as food, household items and toys, cost money. One of the best ways to teach this lesson is to use examples that are relevant to them. For example, if your son wants a new video game, you can help him find the cost and then figure out how much he needs to save to eventually purchase the game. It's also an opportunity to help your kids research the best bargains and in turn help them become smarter and more frugal with their money.
Spend monetary gifts responsibly. Whether it's a $20 gift or a $100 gift, you can use these amounts to teach kids the importance of dividing their money to achieve different financial goals. Instead of letting him or her spend 100 percent of the gift on toys, allow just 50 percent to be spent now, set aside 30 percent in a savings account and use 20 percent toward a charitable donation.
Consistent messages pay off
As a final point, it's important to provide kids with a consistent message about financial matters and setting an example on how to be responsible with money. Make sure both parents agree on the approach to speak and teach about money. Although parents may have different views about handling finances, with kids you need to make sure you are giving the same message.
Put yourself in a comfortable place and get started with helpful steps.
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About BMO Harris Bank
BMO Harris Bank provides a broad range of personal banking products and solutions through over 600 branches and approximately 1,300 ATMs in Illinois, Wisconsin, Indiana, Kansas, Missouri, Minnesota, Nevada, Arizona and Florida. BMO Harris Bank's commercial banking team provides a combination of sector expertise, local knowledge and mid-market focus throughout the U.S. For more information about BMO Harris Bank, go to the company fact sheet. Deposit and loan products and services provided by BMO Harris Bank N.A. Member FDIC. BMO Harris Bank(SM) is a trade name used by BMO Harris Bank N.A. BMO Harris Bank is part of BMO Financial Group, a North American financial organization with approximately 1,600 branches, and approximately $525 billion in assets (as of Oct. 31, 2012).