How to teach kids about financial freedom

The concept of saving, interest rates and comparison shopping can be tricky to explain, but there are some easy ways to get your kids to grasp these important ideas.

Experts recommend you get creative when having conversations about these critical concepts.

Saving money

Financial coach Alok Deshpande said parents should get children to appreciate deals and challenge them to make their dollar go further.

“If we go to Barnes and Noble, and my son likes a book, we’re also going to look it up on Amazon while we’re in the store, because I want to see if I’m actually going to save or not,” Deshpande said.

Making money

Deshpande said one way to teach children how to generate cash independently is to get their help selling things online.

“Let them take the pictures. Let them put it up online. Let them do the research to set the price, and then give them 30 percent,” Deshpande said.

Compound interest

Deshpande recommends parents help their kids experience this concept by giving them $50 and then paying them interest.

“Just say, ‘Look. If you save it every week, I’m going to give you 5 percent interest,’” Deshpande said. “Well, that $50 after six months is close to $180.”

Loans and credit cards

Deshpande said parents need to have conversations with older teens about how to pay for college, student loans and using credit cards.

“That is a really great time, when the kids are listening,” Deshpande said. “They’re engaged. They’re intuned (sic), because it’s about their life. It’s not about a parent nagging.”

Editor's note: This article was assembled from information originally reported by CNN.

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