Financial education for kids, teens and their parents

The lack of financial literacy can result into serious troubles. It especially concerns teens and young adults who have insufficient money management habits and experience to make smart financial decisions. So teaching your kids about spending, saving and investing is vitally important. Preventive financial education will prepare your kids for the real world and give them necessary skills to build a solid credit history that will serve them for years to come. 

Nowadays teens can qualify for a credit card in high classes. However, it is a well-known fact that young people tend to overspend because they can’t plan their budget properly. Teens don’t pay attention to the price of goods and services because they believe they have enough money on their credit cards to make purchases. 

As a result, an average student finishes college with $1,500 debt on a credit card. However, accumulating a large balance could affect more than just a student’s credit score and the ability to take loans. It is important to understand that employers often make credit check to get more information about potential employees. 

How to help your kids develop successful money management habits and financial responsibility? Young people need to get preventive financial education. Researches show that the more information on personal finances parents pass on to their kids, the less debt they accumulate in future. So once your kids start to collect coins, it’s time to educate them about the value of money.

There are a lot of things parents can do to help their kids make well-considered financial decisions. For example, you can explain your family budget. Or you may draw funny pictures to illustrate how you earn and spend money. Or you can show your credit card bill and explain what APR and balance mean. 

It also makes sense to introduce your kids the idea of saving. Let them know that it is necessary to set aside some portion of your income for emergencies and big-ticket items. Having money is not only the result of how much money we earn, but also how well we manage out income. 

If you don’t know how to tell your kids about money and banking, the Internet provides a wealth of resources that present information in a fun and interesting way. Allowing your kids to play the games or do the activities helps them understand personal finances better. 
•    Kidsbank.com is a fun place for children to explore some of the fundamentals of banking. Penny, dollar Bill, Checks, Interest Ray, Mr. EFT and the Professor will teach your children about savings, interest, checking, and other banking services. 
•    YoungInvestor.com is designed for kids, teens and their parents. There are many puzzles and funny games that will teach kids about spending, saving and investing in stocks, bonds and mutual funds.
•    Ustreas.gov/kids includes links to various games and information about the government departments (White House, U.S. Mint, Bureau of Engraving and Printing, The Alcohol 
and Tobacco Tax and Trade Bureau, etc.). 
•    Federalreserve.gov/kids is designed to tell kids about the Federal Reserve System and how it works. You can choose interface in English or in Spanish. The website has question-and-answer format to ensure easy navigation.
•    Creditunion.coop/pre_k (available in both English and Spanish) provides valuable information and tips for parents who want to tell their kids how money works and model good money management. 
Financial education will help your kids avoid costly mistakes and be savvy financial consumers. They will find out that their money can grow if they choose the right forms of investment. By helping your kids build money management habits now, you ensure their good financial health in future!