Whether you like it or not, a big part of being a grown-up involves running through a bank statement, to make sure your finances are in order. Children don’t have to do that yet, but teaching children about money and laying down a solid understanding of personal finance is important, so it is worth talking about things such as what a bank statement looks like, what types of bank statements exist, and what they’re used for.
A bank statement is an official list of everything paid into and out of a bank account. It covers a given period, such as a month; the bank sends statements out regularly to its customers. Payments in might be shown in one column, and the payments out in another. There’s also a running total of how much money is left; this is called a balance.
Different accounts have different looking statements. A savings account might show just a few interest payments going in, while a current or checking account would show lots of small payments out, for everything from shopping to electricity bills, as well as a few payments in, such as a regular salary.
Some include bank statement codes beside these entries, to help you remember what each payment was for. For example, BSP can mean ‘Branch Single Payment’, or a payment made into an account in person, at a bank branch, while TFR can mean a transfer of money between accounts.
In the past, most bank statements were printed on paper, but today more and more banks are offering digital statements, via apps or online. RoosterMoney isn’t a bank, but you can still get digital statements via our app.
Did you know that when you pay money into someone’s bank account, you can add a reference, or just a few words to help the person getting the money know why they’re getting the cash. These show up on a bank statement. However, in recent years, lots of people have been adding in silly references, such as ‘Hogwarts tuition fees’ or ‘From Paw Patrol’. What would you put down for your friends?
Still stuck for conversation starters? Try these top tips to teach children about money and bank statements
You don’t just need money to buy a ticket to travel abroad. Some places also ask visitors to apply for a visa, a special document that lets you enter that country. And to get that visa, some countries want to see your bank statements, to make sure you’ve got enough money to pay for yourself during your visit.
When most people buy a home, they take out a special loan called a mortgage. To get this loan, most mortgage lenders want to see bank statements, to make sure there’s enough money coming in to cover a loan.
For most of us, it’s wise to keep bank statements for about a year, just in case you notice a missing payment in, or an extra payment going out. However, some people keep them for longer. The self-employed are people who work out how much income tax they owe, and pay it directly to the government. They have to keep their bank statements for longer. In the US they need to keep them for three years, and in the UK they need to keep them for five years. Can you work out why these people hang onto them for longer?
Sometimes criminals make fake bank statements, so they take out big loans, or pretend to be someone who is about to receive a big payment. The BBC journalist, Martin Bashir used some fake bank statements to help him get his famous 1995 interview with Princess Diana. The bank statements pretended to show people close to Diana were spying on her.
Sometimes it helps to learn and play. These games should help you explain bank statements to kids
Bank statements are great for maths games, as they show a lot of adding and subtracting. You can test your kids’ abilities by covering over one big figure on a statement, and see if they can work out the missing number via mathematics.
The pages of bank statements are numbered, so they can be ordered properly. Help kids with their number skills by shuffling up a few statement pages and challenge them to reorder them as quickly as possible.
While it's good to keep bank statements, it’s also good to burn them. Destroying bank statements means they won’t fall into the hands of fraudsters. Why not turn your bank statement burn into a mini garden party (though you may not want to roast marshmallows over these flames – they probably won’t taste too good).
Give everyone a random sheet from a bank statement. Then read out a series of two-digit numbers (e.g. ‘44’; ‘37’; ‘21’; ‘05’). The first person to stop and circle ten of those numbers on their sheet wins. If two-digit numbers are too easy, up it to three digits. It should help kids understand what a bank statement looks like.
Children can’t open bank accounts, but they can get used to the idea of having their money with the RoosterMoney app. And they can get started for free. Here’s how.Find out more about RoosterMoney
You kids can also get a pre-paid debit card, a bit like a bank card, via RoosterMoney. It's called The Rooster Card and it's great. You can find out all about it here.Find out more about the Rooster Card
Kids can’t get their wages paid into a bank account just yet, but they can track the money they get paid for chores via the RoosterMoney app. That should teach them about money and work.Find out more about RoosterMoney and chores