While traditional education can provide a solid foundation for life, it is imperative that young people learn the importance of financial literacy. This type of knowledge is key in building long-term wealth and also helps to reduce anxiety about money that many millennials face every day.
Interest rates, financial tradeoffs, and the value of keeping an emergency fund: Our present economic situation provides us with several instructional opportunities that we may and should share with our children. After all, these issues are unlikely to be covered in school. According to the NGO Next Gen Personal Finance, just one out of every six kids will be required to complete a personal finance course before graduating from high school.
That’s why we’ve provided you with money ideas and subjects to talk with the kids in your life, as well as self-study tools (ahem, movies and games) to keep kids’ interest while educating them about money management. Continue reading to get to the top of the class.
Being in charge of the budget is a challenging job.
Are your kids often begging you for money? One Florida parent found a method to stop it in its tracks by having his adolescent and preteen sign a contract outlining the charges he would cover, then giving them a specific amount of money to spend each month on clothes, telephone bills, and other miscellaneous things. “My kid learned a painful lesson when he was thrown into a pool with his iPhone by a buddy…. “He realized the importance of setting aside money for unforeseen needs,” his father stated. Giving your children a paycheck gives them the opportunity to make financial choices and see the results firsthand.
We’re going to get through this together, Atascadero
Higher education economics
“What do you want to be when you grow up?” we’ve all asked a child. Instead, inquire about their passions and assist them in determining how they may be employed in the future. This trains children to be adaptable, which is important in today’s economy.
As they come closer to deciding whether to go to college or a trade school, assist them in weighing the expenses and rewards. Access Your Future, a Junior Achievement software, may assist them in crunching the figures. If you have a kid who is already in college, keep in mind that time is crucial. According to Yale researchers, graduating from college in a terrible economy has a long-term detrimental effect on income, and as a result, many students are exploring gap years and grad school.
Raise your hand if you want to raise a kid who is ready to start saving for retirement right away. According to personal financial experts, we should teach our children that retirement is the largest expenditure they will ever incur, and that it is critical to begin saving early. Help them start a savings account (or a guardian-type brokerage account) to experience the power of compounding for themselves to better comprehend its importance.
Knowledge for extra credit
When you’re young and don’t have a lot of money, it’s tempting to depend on credit too much and put your financial future in jeopardy. Explain to your youngster the value of having a high credit score and how you maintain yours. Share your experiences with financing your first automobile or home, and explain how the interest rate influenced the entire purchase price. Finally, try adding your kid to your credit card as an authorized user and teaching them how to read a statement and pay the debt in full each month.
You’re helping to set your kid up for a better future by giving them the gift of financial knowledge. We can all help to develop the next generation of resourceful citizens by taking a strategic approach.
Resources for homeschooling
Teens should read:
- Web-based games such as “Money Magic,” “Payback,” “Stax,” and “Credit Clash” may be found at ngpf.org/arcade.
For younger children, try:
- Rock the Schoolhouse! “Budget” and “Dollars and Sense” are examples of classic videos.
- Money Smart Kids movies such as “Do it Passionately” and “Saving for Success” are available at Cha-chingusa.org.
Steps to take next
- Invite relatives and friends to share experiences of how they overcame adversity or discovered inventive ways to stretch a budget during a downturn.
- Consider assisting your kid in getting started with investing, bearing in mind that their investments will affect college aid calculations.
- Introduce your family members, even the younger ones, to your adviser, who may serve as a financial literacy teacher’s helper.
You may contact Sarah Santana, an independent opinion writer for The and the Paso Robles Press, at [email protected]
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