Elevating a Financially Literate Teenager
Posted
on Jul 31, 2024
on Jul 31, 2024
It’s back-to-school month for our family, and my 14-year-old is off to highschool. The place has the time gone? As a monetary planner, I typically query if I’m doing sufficient to equip my daughter with the monetary life-skills she must grow to be a powerful, unbiased, and savvy girl.
Monetary training has at all times been a cornerstone of my profession. Whereas I don’t declare to be an professional on instructing youngsters about funds, I’d like to share a few of the strategies I’ve used with my daughter over time.
She discovered the fundamentals of credit score by borrowing from the “Financial institution of Mother” and repaying on time. She practiced counting her cash, preserving it secure, procuring at a makeshift retailer we arrange in the lounge, and saving for issues she needed. She made a number of errors alongside the way in which, however I used to be there to information her and assist her study from them.
As Joline Godfrey states in her e-book, Elevating Financially Match Youngsters, “Allowance will not be an entitlement or a wage. It’s a software for instructing youngsters easy methods to handle cash.” She additionally emphasizes that there is no such thing as a correct quantity to provide; the bottom line is to start out small and improve the allowance because the youngster’s means to handle accountability grows.
When my daughter turned 13, we opened checking and financial savings accounts at our native credit score union. Though I’m the joint proprietor, the account is in her identify, and she or he has full management over it. She has a Visa debit card and has been managing her accounts efficiently, incomes curiosity on her financial savings. She thoughtfully transfers cash from her financial savings to her checking account as wanted.
In response to my present analysis, typical allowance charges vary from $1 to $2 for annually of a kid’s age. My daughter receives $20 each two weeks, and I additionally cowl her share of the iCloud storage invoice. Seeing how properly she manages this, I’m contemplating growing her allowance to assist her study to finances for varsity garments, provides, and different bills.
I’m extremely pleased with her understanding of saving and comparability procuring. She saved over $400 in seven months from Christmas and birthday items, babysitting, cat sitting, doing odd jobs, and her allowance. She even offered her Amazon present playing cards to family and friends to transform the worth to money, which she deposited into her account. Together with her financial savings, she purchased a used cellular phone after thorough analysis and comparability procuring.
My daughter is enthusiastic about horseback using and goals of proudly owning a horse sometime. This summer season, she performed a analysis undertaking on the prices related to proudly owning a horse, together with buy and upkeep bills. This train was eye-opening for her, and whereas she nonetheless aspires to personal a horse, she now understands the monetary dedication required.
Over the subsequent 4 years, I goal to show her extra monetary abilities, reminiscent of:
Utilizing credit score properly
Planning a trip
Understanding salaries for various jobs and careers
Exploring faculty prices and funding choices
Investing and understanding dividends and curiosity
Appreciating the time worth of cash
Negotiating pay and easy methods to receives a commission what you might be price
Dwelling on a finances
Evaluating the prices of shopping for and proudly owning a automobile
And way more
I hope this weblog submit evokes you to consider methods to coach your teenager about private funds. Listed here are some useful sources I’ve discovered:
Monetary Literacy books
Monetary Literacy Packages
Discover Different MainStreet posts
As Joline Godfrey says, “Monetary literacy will not be in regards to the cash however launching nice youngsters!”