With all the benefits that can be derived by preparing children on the importance of savvy money management, we can’t afford not to be on top of this. Children should be educated early on regarding healthy financial habits just as they need to be taught healthy eating habits.
Studies show that children between the ages of 8 and 14 have influence over a large portion of spending in America, to the tune of billions of dollars. Unfortunately, this trend sometimes leads to business targeting these young folks. They gear a great deal of their marketing efforts toward them in hopes that they will badger their parents into purchasing certain items. They also offer such items as debit cards with pictures of their favorite stars on them, enticing them to use cards rather than cash; therefore developing less than desirable money management habits.
It is imperative to keep in mind that children are always watching their parents and taking note of how they handle their finances. Therefore parents should be cognizant of demonstrating smart choices to their children. It is wise for parents to seek out and take advantage of the variety programs that financial institutions offer in order to assist in the process. Just as important are the efforts of these organizations in creating these educational programs and informing the public about them.
Many financial organizations are teaming up with parents in offering various forms of age specific savings account and learning experiences, as well as informative literature.
For example, Northwest Federal Credit Union (NWFCU) of Northern Virginia offers several youth accounts that are designated to various age groups. The Sweet Pea Account is designed for parents to start saving for the children up to age 3. In the next level, elementary school children can open their own account and begin learning about saving money. Plan-it Now, for ages 9-12, increases knowledge of spending and saving in a bit more sophisticated manner yet still caters to the child’s need for financial direction. Ages 13-17 can sign up for First Rewards which offers bonus dividends on money saved as well as additional perks.
Joelle Hahn, NWFCU Senior Marketing Specialist, stated “When we began developing our youth programs, it was important for us to focus on the unique needs of every age group.”
Along with all these age-specific programs, comes an informative handout that parents can use in educating their children about money. A quarterly newsletter is also provided so that parents can keep current on financial happenings and continuously learn age-specific ways on how to teach their children good money management skills.
In her book Raising Financially Fit Kids, Joline Godfrey lists ten basic skills that parents along with financial institutions should take into consideration when training young people about money. They include:
• How to save
• How to keep track of money
• How to get paid what you are worth
• How to spend money wisely
• How to talk about money
• How to live on a budget
• How to invest
• How to exercise the entrepreneurial spirit
• How to handle credit
• How to use money to change the world
Godfrey also emphasizes that there is never a bad time to start talking to children about money issues.
Another notable financial institution that has received recognition for its financial training of young people is the Maine Credit Union League. This league has earned an unprecedented six Desjardins Youth Financial awards in a row for its exceptional guidance in the education of children in smart money management. The premise is that educating children in the formative years will enable them to more likely become financially responsible adults.
Several credit unions along with the Maine Credit Union league organize a number of Financial Fitness - Money Management Experience Fairs each year across the state. The fairs simulate a financial game for high school students, offering them the opportunity to obtain some real life experience in money management.
According to Jon Paradise, Governmental and Public Affairs Manager of the Maine Credit Union league, five fairs are coming up shortly in which they expect approximately 1,500 high school students to attend.
“These fairs are similar to an “interactive” game of Life, where high school students are given a career and salary at the age of 22,” stated Paradise.
The students visit various booths on such topics as transportation, insurance, savings, and education to figure out their monthly expenses; then the students prepare a monthly budget.
“The goal is to have the monthly budget end up with a break even balance or a positive balance,” said Paradise. “We have credit union volunteers helping the students with their budgets.”
The credit unions also participate with schools throughout Maine on an ongoing basis in assisting youth to learn about balancing checkbooks, understanding budgets, building savings plans, and managing credit cards and debt.
As the need for early financial education has become more apparent, a variety of organizations continue to team up with parents in creating innovative and informative methods of achieving this objective. Through this effort it is likely that the future will find more financially responsible adults.
Many financial institutions across the nation will be hosting special events throughout the month of April focusing on financial literacy. Be sure that your organization is doing its part in your community to help educate youth.
