According to blog bankbazaar, here are basic money and banking terms you need to teach your children:

1. Savings
This is probably the most important term you should teach your children. They may not need to know how bank accounts work or about saving schemes at this age; all they need to know is how to save the cash they usually get from relatives or in the form of pocket money and put it to use later. These small lessons can go a long way!

2. Investments
One basic thing your child needs to know is the difference between savings and investments. Many people are often confused and use these words interchangeably. Teach them how they can put their extra pocket money in places where it can grow with time. Alternatively, you can also make investments for them and show them how things work, in a fun format, of course.

3. Credit and debit cards
This is something they can potentially put into the ATM or PoS as soon as they start earning. We ourselves may have made a number of meaningless purchases using our debit or credit card, and repented later. You need to ensure that your child does not end up making the same mistake. You need to make them understand the difference between credit and debit cards and when to use which.

4. Debt
Once you teach them the basics of using a credit card, you need to move to the next concept – debt. Make your children understand that borrowing money from anyone is all right only if they pay the loan back on time. Letting the debt pile up endlessly is not a great way to handle your finances.

Borrowing often doesn’t just affect your budgeting skills, it can also spoil your relationship with family and friends (if you borrowed money from them and you haven’t paid it back in a timely manner). Nobody likes to lend money, especially if they aren’t getting paid back on time. Learning how to manage debt will be useful for the future when your child actually needs to take a loan from a financial institution.

5. Budget
One of the most important lessons about money is budgeting. This means you’ve got to plan it well. You need to teach your children the importance of making a budget and following it meticulously. This includes making a list of their priorities and other basic expenses, and sticking to it. Once they start giving priority to school supplies over the latest video game, you know you’re on the right track.

6. Patience
Although it’s not directly a banking or money-related term, you need to teach your child the importance of being patient. Once they learn the art of being patient, it’ll stop them from making impulsive purchases. This is what most of us waste money on every time we receive our pay cheque and often regret these purchases later.

To ensure that your child doesn’t develop the same bad habit, it’s better to teach them about it in advance. The same applies to investments. Holding on to investments during volatile phases can help earn good returns in the long run.

7. Pocket money
Before giving your children their pocket money for the month, ask them to tell you about how they plan to spend the cash.

It’ll not only help them learn the magic of budgeting, but you’ll also get to keep an eye on where the money is going. You also need to limit this money so that they never take money for granted and learn to utilise it well.

8. Generosity
Money lessons aren’t just about making the most of your bucks, you also need to teach your kids the importance of being generous. Take them to charity functions and show them how generosity can help bring smiles on the faces of the less-fortunate.

It’s not just about writing big cheques for charity foundations, even when it comes to donating clothes, books etc., let them experience it. There’s nothing better than raising a kind and generous individual! As adults, they’ll find that donating money to charity gives them tax breaks too.

9. ATM
It’s necessary to teach your children everything about a debit card and how to use it. A number of banks offer children debit cards, which are a good option to let your child explore everything about handling cash. Something to consider once your kids are old enough.

10. Piggy bank/savings account
If your kid is too young, you can start giving them tips about utilising their piggy bank. But if they’re old enough to understand the basic functioning of a bank, you need to tell them about savings accounts and how they help save better.

With time, they’ll learn about other, better saving options like fixed deposits, but till then, they should know these basics at least.

It’s time you start raising your kids to become financially independent and smart! Teaching them all about these terms will surely help you take a step towards that.

Source: http://rayoonline.com/parentsthese-banking-terms-need-teach-kids-now/2/