by Stacy Francis, CFP®, CDFA
I read in the newspaper the other day that in a survey, high schoolers answered only 48% of basic personal finance questions correctly. The number was only slightly higher – 65% - for college students. This is scary, as good money management skills are crucial for success – and for peace of mind. Since it all starts at home, below are 5 great money lessons that can help your teens get ahead in life.
- Budgeting. How many teenagers do you know who always run out of money mid-month, and beg their parents for more? Teaching your teens to prioritize can make a huge difference as they grow into adults.
- Establishing credit. Regardless of how you feel about credit, the minute your teens are off to college, their mailboxes will brim over with credit card offers. If you teach your teens to handle credit while they’re at home still, the damage is likely to be much smaller.
- Differentiating wants from needs. This is a crucial skill in all aspects of life and no less important when it comes to money.
- Filing tax returns. By becoming familiar with the filing process and learning a few tax smarts, your teens can save a ton of money later on.
- Taking all costs into consideration. Many teens tend to forget about things like insurance, maintenance and repairs when estimating how much their next car is going to cost them. Taking all costs into consideration when making a money decision – no matter the specific circumstances – may be the most valuable money lesson of all.