While financial literacy is a life-long endeavor, the basics are best taught before high school graduation. Books are a great resource to help your young adult, but the conversations you have with them will last longer. Here’s our must-view key topics for starting these conversations.
Teens must know how to create a budget, from the time they start earning an allowance or get their first after-school job. They should know the budgeting basics, income, expenses, savings.
- Credit Cards
Discuss credit and credit cards before your teen hits 18. They’ll be inundated with offers for credit cards and need to know how it works. Interest rates, payment periods, building credit.
- Bank Accounts
Help your teen set up their bank account and explain fees, different types of accounts, minimum balances, interest rates for different savings accounts. Make sure your teens knows how to write a check. They may one day be completely obsolete, but knowing how to find their routing number and account number on a check can be a life saver.
Teens should know the value of a dollar, especially if you’re the one who is footing the bill. Emergency savings, nest egg, repairs, healthcare costs all need to be factored in when learning to save. And it’s never too soon to start planning for retirement.
- Credit Scores
Young adults need to know the importance of credit scores and how mistakes now can affect them for years to come. Wise choices with credit building can ensure they are able to purchase a car or a home one day. Ensure they understand the impact that missed payments can have on their credit as well.
By having these conversations with your teen early and often, you’ll lay the foundation for their financial security that will last a lifetime. They’ll be more open to coming to you for advice if they know you know your stuff too!