Our older son begins middle school today, which brought us to the realization that he’s no longer a little kid. These next few years will fly by and soon he’ll be off to high school. When it comes to raising capable adults, teaching kids how to manage their money is critical. And that’s even truer as they get closer to graduating high school and starting college when they’ll need to make more financial decisions. That’s why I feel it’s important to teach your children to be financially literate early. Today we’re sharing 5 easy steps to help you do just that!
Here are five ways to raise financially literate teens:
- Set an example. The cliché is true – more is caught than taught. You don’t need to be wealthy to be a financial role model for your kids. It’s more about consistency. Watching you stick to a budget and save for the future gives your kids a model to follow. Explain the pros and cons of splurging or sacrificing on certain purchases so they learn to think critically about their money.
- Talk about money. Finances can feel like a taboo subject, but teens need to have a realistic understanding of how money works in your household. You may want to talk about the household’s major expenses, such as rent or mortgage payments, food, car payments, vacations, and college. Also, introduce them to costs they may not see, like insurance, medical costs, and utilities. You can tailor the level of detail to your preferences and their maturity level.
- Open a bank account. Having the responsibility of a bank account helps prepare teens for managing greater sums of money as they get older. And as they make regular deposits, seeing the amount grow offers an incentive to keep saving. Try a “checkless checking” mobile app built for digital natives, such as AxiomGO, offered by Axiom Bank.
- Start them on a simple budget. Habits formed as a teen can last for years to come, so teach your child the basics of budgeting now, even if he or she doesn’t make much money. AxiomGO features a built-in budgeting tool, My $ Manager, that allows teens to set spending limits and savings goals, as well as visually track their progress.
- Get them saving for college. If your teen has a seasonal or part-time job, it’s a smart move to put some of their earnings in a college savings account. They’ll feel personally invested in their education and more confident about their ability to reach their goals.
I hope these tips have encouraged you to speak to your teen (or pre-teen) about the importance of becoming financially literate.
Axiom Bank, N.A., a nationally chartered community bank headquartered in Central Florida, provides retail banking services, including checking, savings, money market and CD accounts, as well as commercial banking, treasury management services and commercial loans for both real estate and business purposes.