April is Financial Literacy Month
Review advice, updates, and news from West Gate Bank!
April 12, 2018
How do we teach our kids to be smart with money? From the perspective of a community bank, we believe the best advice is “give them some real life practice before they grow up”.
April is Financial Literacy Month, which provides an excellent opportunity to share some thoughts on the skills and habits that are never too early to start developing in young people.
- An allowance: An allowance for a job at home is a great way to teach your child about working and earning some money. Cleaning their room, washing dishes, and mowing the yard are all ways your child can begin to understand the concept of working and getting paid. The important thing is to be consistent with the amount you are willing to pay for completing the tasks and not paying them when they don’t complete the tasks. This may require having your child keep a scorecard for you to check their work.
- Savings and delayed gratification: Some kids are natural savers and others are natural spenders. The same is true of adults! Help your child learn how to save by encouraging them to take a small portion of their allowance and set it aside for something in the future--a big purchase they want (i.e. a pair of expensive tennis shoes, technology gadget, or Christmas presents for others.) The spenders may falter and spend all their income on frivolous items, which can provide a great opportunity for them to learn from their decisions if the parents stay disciplined and don’t bail them out.
- Education savings (Having a plan): One of the real challenges young people are having today is not preparing for the cost of college or any education after high school. Too many young people and their families end up borrowing 100% of the cost of a college education and graduate with a $50,000+ in student loan debt. Having a college education is valuable, but not if the cost of acquiring it takes all of your income for a long period of time in the future. With proper advanced planning, it is still possible to achieve a college degree with little to no student debt. What a great gift to teach your child! If you set the expectation as they enter high school that they are going to have to earn at least part of the money for their education, this establishes a need to defer some current spending of all their discretionary income whether it is from you or earned outside the home. Consider matching the amount they save. You can remove the temptation to withdraw the money by using a 529 college savings plan.
These are just three things to consider to help your children become self-sufficient adults. Read more on financial literacy and teaching kids to be smart consumers here: https://apnews.com/954f67d2e03f429897315252fb0a446f
As a community bank in Lincoln, we believe financial education can help our young people and our community to prosper. That is why we have partnered with EVERFI to bring financial literacy education to high school students across Lincoln, NE by providing them with access to the EVERFI™--Financial Literacy learning platform. To learn more about this partnership, click here.