Tuesday, April 21, 2009

Bankers nationwide are celebrating National Teach Children to Save Day on Tuesday, April 21. Founded by the American Bankers’ Association Education Foundation, the day is dedicated to educating youth about the importance of saving.

Parents, Here are Five Tips for Teaching Financial Responsibility

  1. Value of Saving – Teach children why you save and why they should save by using everyday examples like buying groceries. Illustrate how savings can grow by collecting money in a jar or container.
  2. Needs vs. Wants – Explain the differences between needs and wants and how to prioritize spending. Use examples like toothpaste vs. another video game.
  3. Allowance – Consider an allowance to teach how money is earned. Provide an allowance in a way that children can save part of it and spend part of it (for example, if an allowance is $5, give five one dollar bills so some can be saved and some spent).
  4. Set a Goal – Setting a goal for savings or to buy a desired item will help teach a child to be responsible for him/herself and reinforce the feeling of accomplishment when the goal is reached.
  5. Open a Savings Account – Establish regular saving habits that will last a lifetime by opening a savings account with your child.

CHECK OUT THE LINKS on our sidebar for lots of fun resources to help your children save!

Wednesday, April 1, 2009

What Causes the Stock Market To Go Up and Down?

Have you ever heard of supply and demand? When there is a lot of something – a large supply – the price goes down. When there is a small supply of something, the price goes up.

Let’s say when it’s time to eat, there’s only one sandwich and everyone wants it. The price would go up. The person with the most money will be able to buy it. But when there are lots of sandwiches the price goes down. It’s the same with stock. If a lot of people want a certain stock – and there are a limited number of shares, the price goes up. If a lot of people want to sell a stock, and not too many who want to buy it, the price goes down, because the supply will be greater. When everyone wants to buy a stock, the price goes up.

The other thing that affects the price of stock is emotion. When people are very excited about the market and they want to make a more than anyone else and they are willing o do anything – that’s when the price of stock goes really high. That’s called greed. When people are greedy they’re willing to do anything they can. But when people are scared, what do they do? They hide. When people are scared and they sell their stock and put their money in the bank, they are sort of hiding. What’s happening in our markets today? People are scared. There’s a lot of money sitting in the bank.