Back to School – Financial Responsibility
August, the season when kids head back to school to learn about everything under the sun… except for basic finance! What can you do to better prepare your child (or young adult) prior to venturing out into the real world?
The vast majority of us weren’t taught the intricacies of credit, debt, loans, or savings at any point in our life. As scary as it sounds, most of us learn about money as we go. Coincidentally, it can be argued that the best way to learn is by “doing,” but this principle can be a risky way to learn money management. In fact, most of us don’t truly learn unless we make mistakes, but this can be a costly experience when dealing with finance, especially in the long term.
Share your spending and saving habits
As a parent, being open and transparent with your adolescent is one of the best ways to help educate them about personal finance. You don’t need to share every detail of your cash flow, but simply explaining the reasoning behind key aspects of your financial portfolio can greatly increase their knowledge of their importance.
Think about opening up dialog around one or more of the following topics:
- Utility bills
- Checking vs Savings accounts
- Auto loans
Share life lessons
As mentioned above, most of us have learned about financial responsibility… the hard way. However, past experiences are not the judge of what you will do today, but they likely contributed to the person you are today. Additionally, decisions you made in the past (both positive and negative) can serve as an excellent teaching tool for your child.
Think of events that ended up being important life lessons. You can share these experiences with your youth while explaining what led up to this key “event” and how the outcome affected you (or your family). Everything, where good or bad, can be a teaching moment.
Possible discussion topics:
- Account overdraft
- Bounced check
- Financial institution fees
- Saving money
- Personal loans
- Credit cards
Plant a seed
Most parents would do almost anything to help improve the lives of their child. When you instill the values of financial responsibility at an early age, you position your youth to be a successful, self-reliant young adult. Looking to kick-start the process? We offer accounts specifically designed for young adults! Our Youth Savings Account is available to kids, teens and even young adults up to age 20. Additionally, our Absolutely Free Student Checking is open to anyone between the ages of 10 and 20. Both programs are a great first step toward financial independence!