hensley He is a vice president and district manager at U.S. Bank and lives in San Diego.
Our society emphasizes the importance of education in preparing children for success. We invest in science, technology, engineering and mathematics programs, language courses and a variety of extra-curricular activities. All of this is aimed at equipping children with the skills they need to thrive in a dynamic, fast-paced world. However, an important aspect of early education is often overlooked: financial management.
When I was a child, no education was provided regarding this important life skill. As a result, I made a lot of financial mistakes early on. That's why I'm so passionate about helping young people understand the basics of money management.
Fortunately, there are organizations in San Diego that are focused on providing valuable education and resources to youth. U.S. Bank has a long-standing partnership with Junior Achievement of San Diego County. Each year, many bankers volunteer to teach financial education classes and share their expertise on the organization's boards and committees. We recently partnered with them to bring local teens to Finance Park, where they participated in an immersive budgeting exercise in an adult simulation and learned about various aspects of the home buying process. I learned about aspects.
They were shocked to learn (albeit in a simulation) how their debt would affect the types of homes they could buy and the areas in which they could buy them. I heard some of the following comments from children: How to save so much! ” “This is shocking!”
Isn't this the kind of financial know-how that most of us wish we had known sooner?
We may think that we need to master managing our own money before we can talk to our kids about how to manage money. But no matter where you are in your financial journey, you're shaping your children's understanding of financial concepts every day. So what do you want them to know?
There are various How to teach children about fiscal responsibility, you can get started sooner than you think. A 2018 University of Michigan study found that 5 year old children We found that they had distinct emotional responses to spending and saving money, and these were reflected in their real-life spending behavior.
Get your child started right in preschool by introducing them to money, instilling the basics of commerce by practicing counting and pretend-shopping, and giving them a small budget to spend at the grocery store. .
For elementary and middle school students, introduce the idea of earning money through pocket money and discuss spending within numerical limits. Open savings accounts and encourage regular deposits through allowances and monetary gifts. Work with your kids to help them set savings goals, track progress, and celebrate milestones. Explain financial constraints and the value of budgeting.
In the process of teaching children about money, it's important to be open about your own experiences, both good and bad. Explain what kind of financial support they can expect from you in the future as they age (for example, help with buying a car) and how costs such as car insurance will be covered. please.
When you're a teenager, your expenses can increase significantly. Help your child open a checking account and get a debit card. Get them familiar with digital wallets and payment networks like Zelle. Teach them to monitor their bank accounts online for suspicious activity. Distinguish between debit and credit cards and highlight interest on loans. We'll introduce you to basic banking products like CDs and high-yield savings accounts, and highlight some options for growing your savings. Discuss the importance of managing credit balances and risk. This can be accomplished through student loan plans and car insurance.
High school students are also a great time to start talking about investing and how it differs from saving. Explaining the power of compound interest Why is early investment important? As funds for achieving long-term goals such as going to university or retiring. Support their efforts to find a job and help them start investing. If your budget allows, offer to match their contribution with a 529 college savings plan or parental Roth IRA.
Everyone wants to raise financially healthy children. Assiduously prioritize early financial preparation as you would anything else. It's not just about preparing kids for success. It's about the ripple effects that can occur when we give our children control over their financial futures.
