They may just be teenagers now, but they’ll soon be in college, having to make simple financial decisions on their own – and the “real world” is not too far after that! Patricia Seaman from SmartAboutMoney.org
Talks about how to get teens interested in their financial future.
How money savvy are our teens in the US compared to other countries?
A recent analysis on the financial literacy of teens globally shows that American teenagers have a low level of financial literacy.
We came in 9th place out of 18 countries on how smart our teens are about money issues. That’s painfully average.
What are the near and long term dangers for teens who aren’t financially literate?
In the near term, teens who don’t know the basics of banking, budgeting, income vs. expenses are more likely to start their young adult lives by piling up debt.
The longer term danger is that if teens don’t learn the importance of saving money – they won’t be prepared for their retirement when the time comes.
In our retirement, Social Security covers less than half of what we have been earning. The other half needs to come from money we save over the course of our lives.
If teens don’t enter the real world with that in mind, when it comes to their retirement this generation will be totally unprepared.
What can we do to help ensure our teens know the basics of money?
According to the JumpStart Coalition for Personal Financial Literacy, 22 states have a requirement in place to offer a high school course in personal finance education.
That’s not good enough. It’s important for teens to receive financial education early and repeatedly at home and in school.
We need to continue to support the financial education and improving teacher preparedness to teach the topic at school.
But parents teaching kids about money at home is equally if not more important.
What tips are there to help parents teach their teenagers about money?
Parents have the most influence over their children’s behavior.
Talk to your children about money. Not a lecture, but rather a conversation about how things work.
Get children into the banking system so they understand it and learn how to manage basic finances at an early age.
Talk to your kids about wants vs. needs.
Underscore with your kids the importance of savings – even an emergency fund for when unexpected events occur.
Talk to them about your experiences, even your mistakes and how you learned from them.
What are some of the best tools for teaching teens about money?
You can find tips for parents and youth at http://www.smartaboutmoney.org.