Kids' Finance Glossary

For most kids, learning about money is almost like learning a foreign language.

The words will be new and you’ll describe a way of doing things that may seem bewildering at first.

Discussions about money are likely to be your child’s introduction to the adult world. Just about every kid likes – and wants – to be treated like a grownup, or at least a big kid.

So, talk to your child as an apprentice who’s eager to learn. When you use a new term, immediately define it in clear, concise terms appropriate for your child’s age. Have cash, checks, credit cards and bank statements on hand to demystify things during initial discussions. Kick the new words around to be sure you’ve explained them clearly and your kid understands.

Never treat your child as, ahem, a babe in the woods, but limit the discussion to the basics – there’s no need to get into derivatives, hedge funds and IPOs just yet. Plan to add detail as your child grows older. Remember that one size doesn’t fit all – you must tailor the on-going discussions to your child’s age, interests and current level of understanding.

Here’s a list of basic financial terms that you’ll need when introducing your child to money:

Peg the discussion to your child’s age and interest, adding new terms and detail as your child matures. The discussions will continue for years and, who knows, you someday may have a detailed discussion about derivatives.