With consumer debt on the rise and many failing to adequately save for the future, experts say that financial illiteracy is a major problem for Americans—and one that communities and parents have a joint responsibility to address, starting in childhood.
Over 62 percent of the 15- to 18-year-olds tested received either a “D” or “F” on the 2017 National Financial Literacy Test. Without intervention, these young people could grow up without the skills needed to manage credit cards, loan debt or savings goals.
As a parent, you’ve likely already instilled in your children the importance of good grades and healthy decisions, but if you aren’t also discussing concepts like overall saving, budgeting and the importance of having an emergency fund, now is the time to start. Children are never too young to learn skills needed for a secure financial future. To get started, consider these tips:
• Teach young children money basics by playing “store” at home. Take turns being the customer and the cashier. Play board games involving money exchanges to practice addition and subtraction.
• Give children an allowance and help them create a budget. Stress the difference between needs vs. wants to help them make smart decisions when it comes time to shop for clothes, school supplies, toys and more.
• Encourage teenagers to get part-time jobs, then help them make smart decisions about how to allocate their income, whether that’s saving for big-ticket items, putting money away for college or donating to charity.
• Review free, online financial education materials together that are geared for school-age children, such as those found at PurchasingPower.com and JuniorAchievement.org.
Children are never too young to learn how to spend responsibly and save for the future. Get started now in your household.