The most vital lessons for children to learn is the value of the dollar and the importance of budgeting and saving. By learning these concepts early on, there is a better chance they will have successful financial lives.
Boston, MA (PRWEB) April 29, 2016
Building good habits early on can help children better manage their financial futures. In response to National Teach Children to Save Day, national non-profit American Consumer Credit Counseling provides a guide to help parents teach children of all ages, from kindergarten through high school, about money management principles such as credit, saving and the value of the dollar.
“Although it can be awkward at times, talking to your kids about money at a young age is extremely important,” said Steve Trumble, President and CEO of American Consumer Credit Counseling, which is based in Newton, MA. “The most vital lessons for children to learn is the value of the dollar and the importance of budgeting and saving. By learning these concepts early on, there is a better chance they will have successful financial lives.”
In the 2015 U.S. Bank Students and Personal Finance Study, 44 percent of respondents said they have little to no knowledge on how to create and maintain a budget. When it comes to managing their finances, 65 percent of respondents gave themselves a grade or C or below. The study has shown that majority of students do not feel confident when it comes to topics surrounding money management.
In order to help parents, American Consumer Credit Counseling has created a breakdown on how to approach financial education with their children based on age:
AGE GROUP: K-2
What to teach: When kids see money come out of the ATM or see their parents swipe their credit card, they may not realize where money comes from or that it is a finite resource. It’s important to teach them that money has to be earned by working.
How: Help them set up a bank account for saving, and make them work for their money. Give them a chore chart and an allowance for successfully completing their jobs. However, it’s important to delineate between their obligations as a member of the household, and chores that will help them earn allowances. It’s okay to expect your child to clean up after himself or herself, and to contribute to the household responsibilities without “pay.”
AGE GROUP: GRADES 3-6
What to teach: Everyone has a limited amount of money they can use to buy things they need or want. This is why it’s important to make smart choices about how to spend money. Saving is one of the best things you can do with your money.
How: Have your kids make a list of five things they need and then have them rank them in order of importance. Then have them do the same for things they want. Next, assess their lists and put in an estimated cost for each item. This will open their eyes and help them make smarter choices when spending their own money earned or received. Stress the importance of setting a goal with savings, like saving for a new doll, DVD, or video game.
AGE GROUP: GRADES 7-12
What to teach: Understanding credit cards and how they work can be confusing. It’s important that kids understand that credit is not free money. Continue focusing on saving for the future, especially before college.
How: For kids under 18, have them practice using credit by borrowing money from parents. Set up a credit limit, repayment terms, and a standard interest rate to familiarize them with these concepts. If they miss a payment, don’t hesitate to charge a small late fee. This will help teach them the cost of credit and the habit of paying on time. It will also help them learn the basics of credit before mistakes can harm their credit score.
ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:
- For credit counseling, call 800-769-3571
- For bankruptcy counseling, call 866-826-6924
- For housing counseling, call 866-826-7180
- Or visit us online at ConsumerCredit.com
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management and debt relief through education, credit counseling, and debt management solutions. In order to help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loans, youth and money, homeownership, identity theft, senior living and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit TalkingCentsBlog.com