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A Financial Education: Don’t Leave Home With Out It
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As graduation day approaches, many young adults are preparing to leave home for the very first time. They will head out into the world armed with knowledge garnered from years of high school studies in subjects, such as biology and trigonometry. However, many students will still have to learn their financial lessons from the school of hard knocks.
Since students themselves site their parents as their number one source of financial knowledge, it is time to think about what you are teaching them. There are a few things you can do to prepare your child to have a successful financial future.
- Set a good example. Young adults learn by watching what you do, so the more they see you practicing good money skills, the more they’ll learn.
- Get them involved. Allow them to participate in your everyday financial responsibilities. Let them sit with you while you pay the bills, so they can see the totals of your monthly obligations, including utilities, phone bills, mortgage payments and insurance costs.
- Be honest. While you don’t have to disclose all of your financial information to your children, involve them with the family finances as much as you are comfortable.
- Teach them to use credit wisely. Using credit can be a tremendous asset or a costly mistake. Explain the consequences of misusing credit. For example, if a student racks up a $1,000 credit card bill their freshman year, and pays the low minimum payment each month, they will finish their bachelor’s degree, complete their master’s program, finally begin earning a living and still have three more years to go to pay off that spending spree.
Finally, keep an open line of communication with your child; you may be their only resource for financial advice and information. If you need a refresher course yourself, or would like some written information to share with your child, visit www.moneymanagement.org. A little preventative education now could prevent costly mistakes later in your child’s life.
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