How can I teach my high school student the importance of financial literacy?
Even though your child is just in high school, he or she may still have to deal with certain financial challenges. Whether this involves saving for an important purchase like a car or learning how to use a credit card responsibly, it’s important for your high schooler to have a basic understanding of financial literacy concepts in order to manage his or her finances more effectively.
While financial literacy offerings in schools have increased in popularity, a recent study reported that only 17 states require high school students to take a personal finance course before they graduate.1 Here are some ways you can teach high school students the importance of financial literacy.
Advocate saving. Encourage your children to set aside a portion of any money they receive from an allowance, gift, or job. Be sure to talk about goals that require a financial commitment, such as a car, college, and travel. As an added incentive, consider matching the funds they save for a worthy purpose.
Show them the numbers. Use an online calculator to demonstrate the concept of long-term investing and the power of compound interest. Your children may be surprised to see how fast invested funds can accumulate, especially when you match or contribute an additional amount each month.
Let them practice. Let older teens become responsible for paying certain expenses (e.g., clothing and entertainment). The possibility of running out of their own money might make them think more carefully about their spending habits and choices. It may also encourage them to budget their money more effectively.
Cover the basics. By the time your children graduate from high school, they should at least understand the basic concepts of financial literacy. This includes saving, investing, using credit responsibly, debt management, and protection planning with insurance.
1 Survey of the States, Council for Economic Education, 2018
Only 17 states require high school students to take a personal finance course before they graduate.
© 2019 Broadridge Investor Communication Solutions, Inc. brought to you by Rose Street Advisors. All Rights Reserved. This material is intended for informational purposes and should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney, tax advisor, or plan provider. #2615271.1
Securities and Investment Advisory: Services offered through M Holdings Securities, Inc., a Registered Broker Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors is independently owned and operated. Rose Street Advisors is a member of M Financial Group.