(Answers are at the end of the next section.)
Checks and credit cards are both ways to spend money. You must put money into the bank before you can write checks. Then you buy things by writing your checks. The banker subtracts the check's dollar amounts from the money you gave him. You can keep writing checks until all the money you gave the banker is spent.
Credit cards are used to say that you will pay later. You just write your name to buy things. Then the mail-man brings you a monthly bill. This bill has all of the things you bought during the month on it. You have to pay all or part of this bill. If you pay only part of the bill, you are charged interest. Interest means you are charged extra money for not paying all of the bill.
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Some children learn to identify coins and their values long before they enter grade school. They realize what cash can and cannot do for them. But school-aged children are often confused about the act of writing checks and charging purchases to a debit or credit card. If you have ever told your child, "I don't have the money to buy that," only to hear your child say, "Just write a check," or "Just use your credit card," you understand completely.
Today's children learn about money in a very complex world. Children learn most of their attitudes about money from their parents, so a family's guidance and support is the key to helping children understand. Pre teens learn that their money supply is limited. They may need help realizing that money is also limited for everyone else, including their parents. Parents must also help children understand that they need money before they can write a check, use a debit card or repay a purchase made with a credit card.
You may choose to involve your child in family finances to help them understand the concepts of cash, checks and credit cards. If so, the following ideas may prove helpful to you.
Answers: The following answers refer to the terms at the beginning of this document. You may choose to discuss the topics of cash, checks and credit cards with your child, utilizing these questions to initiate a discussion.
1. checking account, 2. currency, 3. charges, 4. endorse, 5. bank account, 6. interest, 7. debts, 8. dollar, 9. balance, 10. withdraw, 11. coins, 12. annual fee, 13. quarter, 14. management, 15. checkbook, 16. ink, 17. cash, 18. credit card, 19. check, 20. deposits, 21. penny, 22. statements, 23. money, 24. nickel, 25. bill, 26. signature, 27. service, 28. dime, 29. credit, 30. bank.
For more information the following publication is available at your county office of the NDSU Extension Service:
HE-260, "Credit-Using It Wisely"
Brought to you by the NDSU Extension Service.
See your county extension agent for more money management information and other family economics programs.
NDSU Extension Service, North Dakota State University of Agriculture and Applied Science, and U.S. Department of Agriculture cooperating. Sharon D. Anderson, Director, Fargo, North Dakota. Distributed in furtherance of the Acts of Congress of May 8 and June 30, 1914. We offer our programs and facilities to all persons regardless of race, color, national origin, religion, sex, disability, age, Vietnam era veterans status, or sexual orientation; and are an equal opportunity employer.
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