Conversation Starters for Spending and Tracking

• Do you count your change and check your receipts? Why or why not?
• Do you track your income (from chores, jobs, allowances) and expenses? Why or why not?
• What are the differences between a debit card and a credit card?
• How are gift cards the same as cash? How are they different?

Conversation Tips for Spending and Tracking

• Explain that cash, checks, credit cards, debit cards (sometimes called check cards), and gift cards are all used for spending. Explain the differences between them.
• Explain how gift cards are just like cash because they can use both to purchase items, however, gift cards are usually restricted to a specific store and only have a set amount of money (value) on them. Encourage them to keep track of their spending on gift cards, and be aware that some stores may start to charge a fee if they don’t use the gift card within a certain amount of time.
• Use a relevant example to show your kids what can happen if they spend more than they have. Here’s a great example:
  • If you only have $3 in your checking account, but decide to write a $5 check for a meal at McDonalds, how much will you owe the bank or credit union?
• When they say $2, explain that while they think they only owe the bank or credit union $2, when they overdraw on their account the bank or credit union may chose to pay the amount, in this case $2, and assess a fee of around $30. If the bank or credit union chooses to deny the check and sends it back to McDonalds, they will each charge a fee of around $30. Now they’ve just paid $65 on a meal at McDonalds! Yikes! Was that burger worth it?
• Talk about the importance of keeping track of their spending and how to use checking accounts, debit cards, and credit cards wisely.
• Have them develop a budget to keep track of their income and expenses.
• Show them how to record their income and expenses and how to pay their bills on time to avoid fees.
• Explain that it’s important to pay their bills on time because their creditors (the people they owe) can charge them fees and finance charges if they don’t receive payment on time. Explain that credit card companies might even raise the interest rate they charge in the future, and utility companies can even turn off service. Yikes! They wouldn’t want that to happen in the middle of winter.
• Talk about the interest charges that accrue if credit cards aren’t paid off each month.
• Explain that if they don’t pay their bills on time, it might affect their credit score. Share that their credit score is a number that tells companies ~ like banks, credit unions, car dealers, credit card companies, etc. ~ how well they manage their money. The higher your score, the better. Explain that the higher their score, the better deal they’ll get when they try to buy a car, a house, or get a loan.
• Talk about the fine print on those “no payments or interest” offers on cars, furniture, etc.
  

Additional Resources:

Financial Literacy

National Endowment for Financial Education
JumpStart Coalition for Personal Financial Literacy
National Association of Federal Credit Unions
Moonjar
National Credit Union Administration

Credit Scores and Credit Usage

www.annualcreditreport.com
www.myFICO.com

Investor Education

National Association of Securities Dealers

Saving for College and Financial Aid

www.finaid.org

Savings Bond Interest Rates

www.treasurydirect.gov

Financial Calculators

TopLine Investment Services

Books

The Millionaire Next Door
By Thomas Stanley and William Danko
Practical information on how other millionaires made their money.

The Richest Man in Babylon
By George S. Clason
Common sense ideas on the concept of paying yourself first.

A Chair for my Mother
By Vera B. Williams
Family picture book that shares a story about saving.

Content on this page may contain information from, and is used with permission by, the National Endowment for Financial Education, the National Association of Federal Credit Unions, Moonjar, and the JumpStart Coalition for Personal Financial Literacy.

Links to additional resources are provided for information purposes only and are not endorsed by TopLine Federal Credit Union.

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