With summer just around the corner, many young people will be getting their first jobs and earning their own money.
The nonprofit financial advising group Myvesta offers some tips on teaching young people about money for a lifetime of financial security.
We learn just about everything in school. From how the sun warms the earth to the calculations for the area of a circle, but we never learn the basics of money.
“People often assume that we should just naturally know how to handle our finances,” said Mike Kidwell, vice president and co-founder of Myvesta, the nation’s first financial health center.
“In reality, it’s a learned skill just like driving a car or using a computer,” he said. “By teaching your kids the basics of money you can help them avoid learning the hard way.”
No matter what the age of your children, it’s a good idea to talk to them about money and teach them financial responsibility.
“Whether you realize it or not, your kids are learning about money from the way you handle yours,” Kidwell said.
“If your children are under ten years old, sit down with them and explain a few basics like how an ATM machine doesn’t just magically give you cash or that when you swipe your card at the supermarket you really are paying for the groceries.”
Once your child reaches elementary school age, Kidwell recommends you should start your child’s financial education by giving him an allowance.
“For younger kids, start off by giving them a dollar or two a week. Try to instill the importance of saving money by requiring them to set aside a small amount for the future,” Kidwell said.
“Also help them to learn the importance of short-term savings by saving up for a big purchase.”
He continued: “As your children get older increase their allowance accordingly. When they reach their teenage years encourage them to get a job or do yard work for the neighbors to earn their own spending money. Consider getting a high school student a pre-paid debit card or help them open a checking account. This will teach them how credit works so they are prepared when they go out on their own,” Kidwell added.
For a comprehensive guide on teaching children about money, download the publication “How to Talk to Your Kids About Money” from Myvesta.org.
Myvesta was founded in 1994. The nonprofit organization gives people practical, emotional and introspective guidance to improve their financial situations and their overall lives. Its programs and services include a residential treatment program, support groups, crisis resolution, online bill management, bankruptcy alternatives, creditor problem resolution, debt management and financial coaching. Prior to April 2000, Myvesta was known as Debt Counselors of America.