When it comes to kids and money, there seems to be a disconnect. While kids may know that they need money to buy things…or that their parents need money to buy things, that’s where it ends for many kids.

Although schools teach the basics of arithmetic, money lessons may fall by the wayside. In fact, a 2017 study found that only 16% of all high school students around the country were required to take a personal finance course to graduate.

This results in high school students looking at you like you have three heads when you hand them $21.00 to pay for a $16.00 bill. You know you want a five dollar bill back, but they are completely confused!

Here are some money lessons that schools aren’t teaching (and ones that you may want to start instilling in your children).

1. If You Don’t Have Money, You Probably Shouldn’t Buy Something

Constantly buying things you can’t afford is only going to put you in a mountain of debt. While many young people are into instant gratification, that can get you in a lot of money trouble. We all have things we want, but do we really need all of them? The answer is no. Kids need to learn this at a young age. It will make life a whole lot easier!

2. Credit Reports Exist and They Can Have a Big Impact 

While a 7-year-old won’t have a credit report, once you hit college and maybe even high school, you may start to have one. Kids should first learn what a credit report is and how it can affect a lot of big things in life like buying a car and eventually buying a house.

3. Credit Cards are Not Horrible if You Know How to Use Them 

Many kids get credit cards for the first time as they head off to college. While they may be enticed to sign up because of the free mug they’re going to get for doing so, many don’t understand how they really work.

First things first, you do need to pay for what you buy when you use your credit card. If you don’t pay the balance off, it accrues interest. This is where many people get into trouble because they don’t pay the balance in a timely manner and end up paying far more than what the original purchase was worth. Unfortunately, they don’t teach this to you in school either and it’s a lesson that’s learned too late!

4. There’s a Thing Called Tax 

You give your child ten dollars to buy a book at the store. Of course, he chooses the one that costs $9.99 because he has ten dollars and in his mind, that will cover the entire cost. When he gets up to the register, the amount due is over ten dollars, because, of course, there’s tax. While your child may look dumbfounded, he just learned that there’s tax added to many things we buy in this world.

This is another lesson that gets forgotten. Not only do kids not understand that tax exists, but many also do not comprehend that the amount of tax will differ depending on the state where they live nor about where the money goes and how it’s used.

5. When Your Parents Buy a Home, The Bank Still Owns It until the Mortgage is Paid Off

Many kids think that buying a home is just like going to the store to buy a sweater. I bought the sweater, so I own it. Mom and dad bought the house so they own it. Technically speaking, we all know that’s not the case. Kids don’t get the concept of a mortgage because it’s not usually taught in schools. If they live in an apartment they may hear their parents talk about paying rent, but when they live in a private home, the word mortgage is usually obscure. The concept that adults pay a good chunk of change every month for many years is foreign to them. They don’t understand that it can take anywhere from 15 to 30 or more years to truly own a home.

6. Retirement Saving is Important Way Before You Hit the Age

Granted, five-year-olds are not thinking about retirement, but as kids get older and start getting their first jobs, they should begin to know about what it means to save for retirement. It’s very likely that those first jobs out of college will offer a 401K program for retirement that will require your child to decide how much of their income they want to invest.

By this point, they should have somewhat of a working knowledge about what a 401K program is, how it works, and why it’s so important. Putting it off until later in life is only going to hurt them in the long run. While you may not want to share the specifics of your own 401K or retirement plan, you can reiterate the importance of it and give them some notes about how it’s all done.

7. Learn How to Balance a Checkbook

While much of the banking done today is done online, kids should still know the basic concepts of balancing a checkbook to avoid overdraft fees. It’s simple math, but math that many kids don’t understand because it was never taught to them in school.

Knowing how to balance a checkbook and even write a check out properly is a life skill. If you’re teaching your child this, you could also throw in some online banking lessons since that’s not going away anytime soon. Understanding how a bank account works is a skill that everyone needs to have.

8. Learn How to Invest Money & How the Stock Market Works

Understanding the stock market is hard enough for adults, never mind for kids. But, it’s a valuable skill that can help you make a good amount of money if you understand it and do it correctly. Knowing how stocks work and where and how to invest money is a valuable skill that usually isn’t taught in schools, but one that is vital when you’re “adulting”. Even having a limited understanding at a young age can make a difference.

9. Understand Student Loans

The majority of high school students heading off to college take out some kind of student loan. Their understanding of how it works may be limited to knowing that they need the money to go to college, someone is going to let them have it, and they’re going to have to pay it back. Many don’t know how much they’ll have to pay back, when they’ll have to pay it back, or the fact that they’re going to get charged interest on whatever amount they borrow.

Some type of crash course in student loans is vital so teens know exactly what they’re getting themselves into when they take out student loans. They will be over the age of 18 once they graduate and the loan will have their name on it which means they will be responsible for paying it back. Parents may have taken out their own loans to help cover the college cost, which they will be responsible for themselves.

10. Learning How to Set a Budget

Another life skill that seems to be forgotten is the skill of setting a budget. It’s one that many adults still struggle with! It’s important for kids to know that you can’t spend more money than you take in. While they may find it boring, kids need to learn that adults budget to pay monthly bills and other expenses based on what they earn. This is partly why some people can afford larger homes and more expensive cars than others. It’s all about budgeting (or at least it should be!).

One excellent way to teach money lessons to your child at a young age is to take a hands-on approach. Many kids learn better by doing things themselves rather than listening to someone talk about how to do them.

There’s nothing better to teach them about real-life money lessons than to let them start their own business. If you think your child is too young to become an entrepreneur, think again! Young children are probably the best candidates because they have a ton of energy and some great ideas.

At Boss Club, you can let your child become his or her own boss with their Boss Club Box. They can start their own dog treat business, bath bomb business, or gourmet cake pop business. Each kit includes all of the beginning tools needed to get their business off the ground. As they start their business, they’ll learn about budgeting and how to manage money.

The business they open with their Boss Club Box today could become the Fortune 500 Company of tomorrow!