Many individuals today lack basic financial literacy. They get into certain habits when it comes to their money and don’t know how to break these habits, as they know nothing else. Parents need to ensure their children know how to manage their finances, as this is essential to a productive life. What steps can a parent take to advance this goal?
Young children understand the concept of money. They watch their parents pay for goods with cash or a credit card and learn from this. Now is a good time to begin showing them how to save and invest as well as spend. Parents should also engage young children in philanthropic activities. While a parent may give money to an organization, a child can donate toys they no longer play with. This giving attitude will continue later on in life if they are taught it at an early age. Another way to start them on a life of financial literacy is to help them open a savings account at WECU.
The Middle Years
Between the ages of 6 and 12 serves as a good time to expand on concepts children have already learned. For example, the child may have an item in mind they want to buy. Show them how to save up for this item and budget their funds to ensure they have enough for the item and other things they may want to purchase. They learn to be patient and work toward a bigger goal when they must save their funds for a big purchase. Parents at this time may wish to give their child a debit card, so they begin learning how debit and credit cards work. If there is no money on the card, they can no longer use it. Learning this lesson early will benefit them greatly as they move through life.
The Teenage Years
Work with children on their critical thinking skills during this period, so they know what is a want or a need and how best to spend their money. This is a great time for parents to guide them in making decisions about how to spend their money. Although children often think they know best at this stage of life, the lessons parents teach them sink in. They will revisit these lessons when they go out on their own. Sit with them and go over various portions of https://www.wecu.com/ so they know where to find information when they need it in the future.
As children go out on their own, they make mistakes. Parents should be there to guide the children through these mistakes without bailing them out. Now might be the time when they get their first credit card and go overboard with their spending. Provide advice on how to pay this debt down without accumulating more or have them reach out to a financial expert at https://www.wecu.com/contact-us/. Teach them to ask for help when they need it, as no person can do everything on their own.
Financial literacy remains a skill many people lack. Don’t let this happen with your children. Begin early and teach them to use money wisely. They’ll thank you for doing so as they move forward with life.
WECU, a Bellingham, Washington-based credit union, currently serves more than 132,000 members and maintains over $2.1 billion in assistance. The credit union employs 415 workers and gave approximately $5,000 to community groups and local nonprofits in 2020.