Financial Literacy Survey reports that 41% of U.S. adults graded themselves a C, D, or F for personal finance knowledge. It's important for parents and teachers to educate children early on about responsible and effective financial practices.At an early age, students can be taught the value of savings through an allowance. This portion of financial responsibility will teach children the value of a dollar and the necessity of simple budgeting and monitoring of expenditures. An allowance may also be an opportunity to teach a child about credit management by setting a limit of how much a child may borrow and setting potential consequences for missing payments.
Board games like monopoly and online financial quizzes found on credit and banking websites targeted at young people can serve as excellent tools to teach financial literacy. Or, these games may be built into an allowance system; for instance, rewards for maintaining good credit or a specific amount of savings. One of the best ways to instill good financial practices by stressing the good habits you practice daily. As a role model, a parent may express the importance of skipping out on short-term rewards for improved rewards in the long term.
A young adult may gain a solid foundation in credit responsibility with an understanding of personal budgeting, their own checking account, or with a co-signed credit card. A parent may provide this responsibility to a child and monitor account activity to ensure the young adult is using his/her money wisely. It's important that a parent develops these practices early on so that financial responsibility becomes second nature in adulthood.
About the Author
Dan Schuler is a freelance writer who writes about the intersection of business and technology and how to keep up with the changing times in media.
