Financial knowledge is one of life's primary skills needed for success. Yet, according to the 2017 National Report Card on State Efforts to Improve Financial Literacy in High Schools, issued by the Champlain College Center for Financial Literacy, only five states received an "A" for their efforts to teach financial education, and 27 states received grades "C", "D" or "F".
In most cases that leaves the responsibility of teaching high school students up to their parents. Unfortunately, some parents feel they are not knowledgeable enough to teach on the subject.
Making Financial Decisions
One way you can help educate your child about money and finance is to allow your child to make some financial decisions on his or her own. You can set your teen up with an account of his or her own while you work with them on their spending limits.
This helps teens make financial decisions based on the money that is available to them.
While some parents would prefer their teens not hold jobs while focusing on school, it's also important for them to have opportunities to make money on their own to learn about budgeting and finances.
Aside from part-time jobs where they earn regular wages, other opportunities exist for teens to make money that will not interfere with their education such as:
- Dog walking
- Household chores
- Neighborhood services
There are all kinds of opportunities available to teens, including some part-time jobs that only require a few hours of their time each week.
Sit down and work with your teen to create a budget for their essentials. This includes the things that are necessary for them to get through their week, such as:
- Hair products
- Spending money
Give your high school student a budget to work with every month with the reminder that he or she needs to plan for larger purchases and may need to sacrifice smaller purchases to make room for more significant expenses along the way.
It also allows them to see the value in shopping sales, comparing prices, using coupons, and purchasing cost-effective products.
Setting high school students up with accounts alongside their parents' allows parents to best support and find teachable moments. Having a bank account gives them an invaluable education in how to operate their bank cards, balance their accounts, and manage their money. Keep these things in mind, though to make it a positive learning experience.
- Consider debit card access only. No checks.
- Agree on spending limits to help your teen from overdrawing their account.
- Stay aware of account activity. When teachable moments arrive, teach!
- Make a point of sitting down once a month and reconciling outstanding expenses and spending choices with your teen.
Working with your teen to make sure he or she understands banking basics now will help ensure successful spending habits as adults.
Send Your High Schooler into the World with Solid Financial Skills
To recap, the following will help your teen develop financial knowledge before they need to put it into action on their own.
- Let them make small financial decisions.
- Teach them the basics of budgeting, buying, and saving.
- Provide them with opportunities to make money of their own and manage it.
- Teach them banking basics with their own, supervised, banking accounts and debit card access.
Following these critical steps allows you to be confident you're sending your teens into the world with the education they need about money.