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Basic Financial Terms for Children and Teens

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The Wall Street Journal just published an article titled, “Three Financial Terms Kids Need to Know” by the Yoder et. al., and while I usually love the personal finance section of the WSJ this article was simply ridiculous.  The article provides a series of obviously and painfully fake interactions between the Yoder Pops and Yoder Children to finally get to the definitions of Direct Deposit, Dollar Cost Averaging and Index Mutual funds.

While I am not going to dismiss the importance of any one of those three topics, are they really the three which should be highlighted by the WSJ?  How many more important terms can you think that every child should know?

Real Financial Terms for Children

As one could imagine 19 year old Evan was “a  handful” to say the least, but there are certain financial terms I wish I could have taught him and they are much more applicable then the ones above to a 19 year old.

Overdraft Fees

Hey 19 Year old Punk Evan, the one with the horrible blonde tips that lasted 10 days, do you know what an overdraft fee is? Don’t you roll your eyes at me because you got hit with a few these bad boys in your life.

An overdraft fee is when the bank charges you for not having enough money in your checking account.  Yup, the bank actually charges you when you don’t have enough money.  Seems counterintuitive, huh? Especially when you think that they pay you money when you have lots of it!

How do you avoid the Overdraft fee? Don’t spend more money than you have in your checking account.

ATM Fees

Hey 19 year old Punk Evan, the one with the ridiculous earing that lasted all of 3 weeks after you got back from spring break because your father paid you $500 to get rid of it, do you know what an ATM fee is?

ATM fees are charged when you go to another bank’s atm or a private ATM.  You can get charged twice once from your home bank and then the ATM owning bank.  So, Evan, stop going to the ATM in the student center every time you need a $20 to buy horrible sbarro’s pizza or you are on your way out to the bars.

Credit Rating

Hey 19 year old Punk Evan, the one that drinks way too much and buys too many drinks for girls that aren’t The Future Wife, your credit score matters so stop being a jerk!  Pay all your bills on time, don’t take an unsecured loan just because it is offered to you and those t-shirts that they give you to apply for a credit card aren’t worth it.

I know you’ll complain that you can’t get your credit score up without a credit card, but you are wrong there are ways to increase your credit score without a credit card.

What real lessons would you like to tell 19 Year Old Evan because dollar cost averaging just went over his head?



  1. Do you think telling any of that to 19 year old Evan would make an impact? I wonder what would…

    Dollar-cost-averaging is one of my favorite financial concepts… It’s way more fun to learn about than overdraft fees. (The best is when you get multiple overdraft fees, and they’re no longer $20 like they used to be, they’re $35 each.)

  2. Hmm, I didn’t think about explaining those terms to my kids, but it’s a good idea.

    Luckily, my kids have an affinity towards finances, so I think it will make sense to them!

  3. Did you know about those terms when you were 19 Year Old Punk Evan?

    ATM fees would be good to know. Hit it over the head to the punk teenagers lol.

    Or how about “the value of a dollar”. Teenagers go through $ like water and it would be nice if they realized how much that iTouch REALLY costs before they go ahead and use mommy’s card. 🙂


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