[July 12, 2017] |
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Teaching Kids the Financial Facts of Life
For good or bad, today's kids have access to more information than ever
before. But even though they can find answers with just a few
keystrokes, few know much about managing money.
"Despite the boundless information online, the best way to learn about
money is to follow the footsteps of past generations, when people spent
less than they earned and saved for big purchases," said Michael
Sullivan, a personal finance consultant with Take Charge America, a national
nonprofit credit counseling and debt management counseling agency.
"It's important for parents to instill responsible money habits so their
children can succeed in the future."
Sullivan offers six tips to help parents teach their kids about finances:
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Communication. The Council for Economic Education's Survey of
the States, Economic and Personal Finance Education in Our Nation's
Schools 2016 study reported that only 17 states require high school
students to take a course in personal finance. Parents shoulder the
responsibility, but many simply don't discuss money with their kids.
Without open communication at home, kids may not learn the value of a
dollar.
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Wants/Needs: We live in an immediate gratification world where
the line between "want" and "need" is blurred. Ensure your kids
nderstand the difference - and take care not to indulge their every
whim - to raise kids with the discipline and patience needed to fight
off the temptation to rack up credit card or excessive student debt in
the future.
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Budgeting: Show your kids how to budget their money, making
sure you include line items for savings and even charitable giving. A
physical budget is an invaluable tool in teaching them to allocate
their dollars, measure their progress toward large purchases, and
ensure they spend less than they earn.
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Practice: Provide your kids with a regular allowance, encourage
them to get a job, or offer frequent opportunities to earn money at
home. Allow them to practice the lessons learned by funding their own
"wants." Children will quickly learn how much things cost, how money
is earned, and the importance of budgeting and saving. Give them a
chance to make mistakes, too, to learn valuable lessons.
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Financial Accounts: Take the lessons a step further and help
your kid set up a savings or investment account. Older children and
math whizzes will be fascinated by compounding interest, which may
boost their motivation to save more.
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50/50: Today's kids are growing up in a high-pressure consumer
culture, and parents often give in to their desires for clothing,
toys, gadgets and entertainment. It's important to give children the
opportunity to put skin in the game to reinforce the value of money
and bolster their financial ability. To that end, many parents arrange
a 50/50 or matching-funds agreement with their kids for big-ticket
items like a car, a vacation or even college tuition.
For more information about budgeting, credit counseling, debt management
or student loan repayment, visit takechargeamerica.org
or call (888) 822-9193.
About Take Charge America, Inc.
Founded in 1987, Take Charge America, Inc. is a nonprofit agency
offering financial education and counseling services including credit
counseling, debt management, student loan counseling, housing counseling
and bankruptcy counseling. It has helped more than 1.6 million consumers
nationwide manage their personal finances and debts. To learn more,
visit www.takechargeamerica.org
or call (888) 822-9193.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170712005298/en/
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