Kids and Finance

Hey, MomVesting readers! Here's a step-by-step article about building credit, laid out in easy terms for all the young people we love. Feel free to share with the young adults in your lives!

When first starting out in building your financial path, you may be confused by the many details that go into personal finances. Checking accounts, credit cards, debits, loans, credit scores – eek! It may seem overwhelming. Fortunately, it doesn't have to be. Let's take a look at one of the major parts of your financial life: your credit score.

Explaining the Credit Score

If there's one thing that's difficult for a child to understand, it's a change in finances. Often, their entire short lives have centered around one way of living, so switching gears can seem unfair, especially when the alteration means cutting back on some of the things they have learned to expect in life. So how can you as a parent explain to them why Chuck E Cheese is out of the question when life throws you for a financial loop? Let's look at some options.

Explain Money

Kids can seem so fragile. I mean, they're just these little people, innocent and carefree. They can't possibly handle adult finance topics, right? Many people think that talking about losing your job or having to cut back hours at work would just be overwhelming to their little brains. But it's often not the case when presented well; kids can handle a lot more than you might think. Let's look at ways to handle the tough subjects with children of all ages.

Talking Shop with Young 'Uns

As we continue to discuss ways to teach kids about money, we come to the task of introducing kids to the world of business. And particularly to cultivating their own businesses. Since business management can teach children about working together as a team, giving direction, going on sales calls and managing money, developing entrepreneurial skill sets is almost integral to life. And it's really not as difficult as it may seem at first glance. Let's look at some business ideas that can help give your kids an edge.

Lemonade Stand

There are a ton of toys out there that claim to teach kids any number of skills, from simple computers for your future techie to board games that encourage budding writers. For the future banker (or just a child who understands money basics), finance toys are available. But do they work? Let's take a look at a few.

Cash Registers and Play Money

Children are pretty smart. They pick up on things you'd never expect them to, like when you swear under your breath, barely audible to their little ears. But they also can pick up on the general meaning behind some pretty complex financial definitions, like inflation. Let's look at the ins and outs of inflation, through a child's eyes.


When I was young, my mother was a poor single mom. She didn't make much, so we never had much. Of course, this never bothered my brother, sister or me; we never knew we were poor. What we did know was this: money has a great power. A purchasing power. An amazing ability to buy either a large quantity of things or one item. How did we know this at seven-, six- and three-years old? Why, our mother taught us. Today I'll let you in on her secrets to teaching kids about purchasing power.

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