The best way to teach kids financial literacy is in the context of their everyday lives. Here’s this month’s teachable money moment:

Knowing and understanding money vocabulary is an important step towards financial literacy.

“We’re going to cut back on our expenses and cancel the magazine subscriptions we don’t use.”

“How much profit did you make on your lemonade stand?”

” No, we can’t buy that this week because it’s not in our budget.”

And here’s an old teacher trick to introducing kids to new vocabulary: Say the same thing two different ways. For example, you may say, “I’m going to put money into my savings account; I’m going to deposit my money.” You’ve linked what they can figure out – putting money into an account – with the money word that describes it – deposit. No lengthy explanation. And, at some point, you’ll just use the money word.

When money vocabulary is used as a part of daily life, kids come to see money as simply something we do.

Here is a list of money words kids should be familiar with by the time they enter high school:

deposit/withdrawal
credit/debit
insurance
mortgage/rent
borrow/loan
income/expense
earn
budget
interest/compound interest/simple interest
save
opportunity cost