The importance of teaching financial literacy to teens
How financially literate are your kids and grandkids?
A new study shows close to 75% of teenagers say they don’t feel confident in their knowledge about personal finance. The study also shows 32% of teens can’t tell the difference between a credit card and debit card.
Financial literacy is not taught in schools and so many kids are left out when it comes to this critical information. But financial choices made early on will impact them for a lifetime.
We talked to Rachel Caballero of TruWest Credit Union about the importance of teaching kids how to be financially savvy.
Teaching teens money smarts
There are things parents and grandparents can do to help teens understand money and fiduciary responsibility:
- Encourage a summer job
- Introduce them to credit
- Discuss importance of being responsible with credit
- Consider a Roth IRA
- Help them set a budget
- Encourage them to stay invested
- Let them know they’re not alone
And remember, it starts at home. When parents or caregivers show kids how to achieve financial goals through budgeting, saving and investing, children will have confidence they can do the same.
Bite of Reality: Hands-on taste of real world finances
Also, TruWest is helping kids learn financial literacy by allowing them to live a day-in-the-life of an adult through the Bite of Reality financial education simulation.
Bite of Reality is a hands-on, app-based simulation giving teens a taste of real-world financial realities. Participants are given a fictional persona. That persona includes their occupation, salary, credit score, a spouse and a child, debt and medical payments. The teens then visit various “merchants” to “purchase” items from housing and transportation to childcare and groceries. When and if the teens get in a bind, credit union experts counsel them on their decisions and coach them to purchases that better fit their budget.
Visit TruWest’s website here for more information.