Summary
Credit and interest may be difficult for children to grasp. Here are some ways to bring the concepts home
The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.
While your kids may readily grasp the concept of putting money aside for a rainy day, getting them to understand how interest can add to their wealth or leave them drowning in debt may require more novel explanations.
Try comparing interest to the idea of renting, suggests Elisabeth Donati, owner of Creative Wealth International, a Santa Barbara, Calif., company that holds financial summer camps for children. The next time you rent a movie tell them, “we had to pay a rental fee in order to use this video. When you put your money in the bank, the bank pays you a rental fee to use your money,” Donati explains. Here are five exercises you can use to make the concept more real for your kids (click through each lesson).
See related:Kids learn best by practicing their money skills, study shows, Teaching kids good money habits by example, Preparing kids for credit card management
Editorial Disclaimer
The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.