Whenever we talk to parents about teaching money to their kids, we always suggest teaching the kids to budget and manage their money by having six different accounts for different purposes. We actually use the acronym MAGNET to help people remember this. (Also, before I start, I'd like to point out the fact that this strategy is also something we recommend for the parents too.)
The main aim of having six different accounts is to manage your money effectively so that all areas of your life are fulfilled and you are working towards the ultimate goal of becoming financially free.
When we recommend this strategy to parents, one of the most common question we are asked is "What about all the bank charges we'll be faced with as a result of having all of these accounts?"
Here's my response to this:
Our first focus is to win the money game in order to become financially free. So focus on this instead, the idea of financial freedom is a powerful and positive thought whereas focusing on the negative aspect of the fees you may be charged is uninspiring.
Now, I just say - find a bank that doesn't charge fees. There are a host of them since a certain bank in Australia started the trend. However if you are stuck with a bank that does charge account fees and don't want to change, consider this: would it really matter if you were charged a minimal amount every month if at the end of the day, you reached your goal of financial freedom by following a step by step process for managing your money?
Also nearly all banks have online accounts which offer higher interest rates and no fees, compared with normal transaction accounts. So talk to your bank about these accounts. If your bank doesn't have them, perhaps you should look at other banks that do offer these.
Another thing to keep in mind is that if you keep a certain amount of money in your accounts each month or deposit a certain amount you may not be charged bank fees. Just check with your bank to see what the minimum amount is as all banks have different amounts.
My point is that it's a mentality thing - to win the game you need to play and managing your money is critical to winning the game and becoming financially free, so don't get hung up on the charges!
Looking for more ways to teach your kids about money? Visit http://www.moneytoolkits.com and claim your FREE copy of moneySMART$ emagazine written by Nicole Clemow and the team at Money Toolkits. Nicole is an international author and speaker on the subject of teaching kids about money and how to make it.
By Nicole Clemow
The main aim of having six different accounts is to manage your money effectively so that all areas of your life are fulfilled and you are working towards the ultimate goal of becoming financially free.
When we recommend this strategy to parents, one of the most common question we are asked is "What about all the bank charges we'll be faced with as a result of having all of these accounts?"
Here's my response to this:
Our first focus is to win the money game in order to become financially free. So focus on this instead, the idea of financial freedom is a powerful and positive thought whereas focusing on the negative aspect of the fees you may be charged is uninspiring.
Now, I just say - find a bank that doesn't charge fees. There are a host of them since a certain bank in Australia started the trend. However if you are stuck with a bank that does charge account fees and don't want to change, consider this: would it really matter if you were charged a minimal amount every month if at the end of the day, you reached your goal of financial freedom by following a step by step process for managing your money?
Also nearly all banks have online accounts which offer higher interest rates and no fees, compared with normal transaction accounts. So talk to your bank about these accounts. If your bank doesn't have them, perhaps you should look at other banks that do offer these.
Another thing to keep in mind is that if you keep a certain amount of money in your accounts each month or deposit a certain amount you may not be charged bank fees. Just check with your bank to see what the minimum amount is as all banks have different amounts.
My point is that it's a mentality thing - to win the game you need to play and managing your money is critical to winning the game and becoming financially free, so don't get hung up on the charges!
Looking for more ways to teach your kids about money? Visit http://www.moneytoolkits.com and claim your FREE copy of moneySMART$ emagazine written by Nicole Clemow and the team at Money Toolkits. Nicole is an international author and speaker on the subject of teaching kids about money and how to make it.
By Nicole Clemow
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