With the economy tanking the way it is, does planning to live on a pension make any sense at all? Stop kidding yourself.
Invest! In your kids!
Young people who learn to manage money early in life can avoid the financial woes that their parents face in today's troubled financial world. And schools and community groups are stepping up to underline the importance of students understanding finances. Getting a grip on financial life skills is as vital for teenagers as reading, writing, or math.
Our kids will face a far more complex financial world than we ever did. Financial markets today develop and change overnight. Parents can help by showing responsible behaviour with finances. Give kids an allowance to help them learn about values and priorities with money early by handling their own.
Community centres and financial institutions are developing financial awareness programs for teens. In Victoria , Canada , for example, Burnside Gorge Community Centre, with support from other agencies, is planning to offer a free program this fall for youth 12 to 16.
Last year, their Youth Individual Development Account Program included a special savings account with the local Vancity Credit Union. The program featured matching contributions-with a pre-set limit-to encourage savings. The kids chose goals, like saving for a car or a bike and kept the money in savings to build interest. Goal-setting, budgeting, credit, debt, and investing sessions were also included.
Vancity has 52 youth credit union programs in B.C. with 4,800 members and $2.7 million in savings. All are operated within schools by students. Goals include teaching principles of saving, money management, and responsible spending. Students learn about earning interest and being professional and improve organizational and teamwork skills.
Junior Achievement of Canada is well-known for giving students hands-on experience at setting up their own companies. Students use an interactive web program to compete as companies in a fictitious marketplace. The program teaches financial and money management, budgeting, and the difference between wants and needs.
Teens also look at how education can affect their long-term future. How will they afford the lifestyle they want to lead? Does that match up with their employability skills? JA programs are free and largely offered through schools. The focus is on delivering more high school programs. These have a deeper impact for students who really are looking ahead, rather than banging their head against their school locker door.
Albert Einstein claimed that compound interest is the greatest mathematical discovery of all time, and he had a relatively good head for figures. But kids learn most of what they know about money from their parents, so send the right message.
Here are a dozen ways how:
Introduce children to money as soon as they can count.
Discuss savings values, making money grow, and spending wisely.
Let them learn the difference between needs and wishes.
Show the value of saving over spending
Explain how interest-compound interest- works on savings.
Give them an allowance and encourage them to save. For example, give $5 a week in ones, and encourage them to save $1 a week.
Take them to a bank or credit union and help them open a savings account.
Encourage them to keep financial records.
Take them shopping to teach them about money and thrift.
Let them make their own spending decisions and learn from their successes and mistakes.
Make them aware of borrowing pitfalls, paying interest, and accumulating credit card debt.
Encourage regular family discussions about finances regularly, where younger children can add up the interest from their savings.
Do the math now, and when your time comes time to stretch out in the sun, Junior'll be ready to take care of the finances.
Disclaimer: All information on this site is provided for informational purposes only! By no means is any
information presented herein intended to substitute for the advice provided to you by any health care or other professional
or organization.
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