Teaching Your Kids About Financial Literacy
Students may not receive a thorough financial education in school – if at all. Not only is there a great need for financial education, but studies show that kids have an interest in learning about it. We’ve compiled some statistics on the state of personal finance among teens in the U.S., as well as some practical ideas parents can use to take the first step in introducing kids to financial literacy.
The best way to ensure your kids understand personal finance from a young age is by taking control of the message. The lessons you teach your children at home can help give them the foundation they need to succeed when they go out into the world.
To help give you some ideas for starting your child’s financial literacy journey, we’ve put together four easy ideas for you to consider implementing this month.
Many banks and credit unions offer student bank accounts. These accounts often include features like lower fees, lower minimum balances and lower or free ATM rates. Opening one for your student can give them the opportunity to manage their own checking and savings accounts. Encourage them to contribute often to their savings, and show them how much their money grows as they contribute in small increments. This simple lesson can help kids understand how much money adds up a little at a time.
To a teen, conceptualizing financial goals can seem complex or foreign. When they’re often only making pocket money through allowance or weekend odd jobs, it’s tempting to spend every cent. This is why setting financial goals is so important. Helping your kids set realistic goals for their money can help them feel accomplished when they reach them. As a bonus – the added confidence can encourage them to continue setting (and reaching) financial goals in the future.
Bank account – check. Financial goals – check. Now, creating a budget is imperative to bring it all together. Helping your child understand how to create a basic budget in a program like Microsoft Excel or a mobile app like Mint can show them just how easy it is. Establishing a budget also adds a layer of accountability, as well as a continuous strategy for ongoing financial success. There are many, free budgeting programs and apps out there to choose from, so your teen can do it all from their smartphone.
This may be the most important step. Make sure to model fiscal responsibility for your kids by saving and planning for your own retirement. Leading by example is a powerful way to teach your children using first-hand experience. If you’re not enrolled in your AIG Retirement Services' retirement plan – talk to your HR director or financial professional about how to get started. Enroll in your AIG Retirement Services' retirement plan here or register for online access to our digital tools. You may also want to consider increasing your contributions. Finally, this game can help your kids visualize the difference a few years can make on your future.
Financial literacy is important for everyone! Make sure to take control of your retirement by enrolling or registering for your plan.