South Carolina State Senator Luke Rankin has pre-filed a bill that would require high school students to take at least one half-credit personal finance course and pass a test demonstrating their mastery of that knowledge. Students failing to meet this requirement would fail to graduate. While this bill is currently a long way from becoming law, Retirement Phase Expert Phil Cannella believes it’s about time our schools took some responsibility for teaching teens about their finances.
“The best time to learn about financial matters is when you’re young,” says Phil Cannella, “If we took more time to teach our kids about topics like personal finance and retirement planning, they would be more prepared for retirement when they grow older.”
Of course, teaching kids to be responsible with their money might be easier said than done, and our schools can’t get the job done on their own. A financial education starts at home, so if you’re interested in teaching your kids about financial responsibility, here are a few tips from Phil Cannella and the team at Crash Proof Retirement on practical ways to impart your wisdom:
Have Them Get a Job
Learning about money starts with having money, and that means getting a job. Your teen might not like it but getting a job will go a long way towards teaching them to be responsible and reliable in general, plus their first paycheck will be an opportunity for them to learn about a whole host of topics related to taxation.
Open a Bank Account
Once your teen has their hands on some money, they’ll need to learn how to hang onto it. Have them open a bank account; they’ll learn all sorts of interesting things about how banking works and they’ll have a place to start saving the money they’ve earned at work. Your teen’s bank account will be the perfect prelude to their first big purchase: a car.
Let Them Buy Their Own Car
These days, many teens expect to get a car as their 16th birthday present. While they may not appreciate the gesture right now, we suggest you break with expectations and let them buy their own car. First and foremost, they will learn about setting a goal and saving money to achieve it. When it’s time to actually buy the car, you’ll have a chance to teach them about the buying process, how auto loans work, and (depending on the price) what it’s like to live with a monthly payment. As a bonus, making their monthly car payment on time will help your teen build a credit score, giving them better opportunities in the future.
Many Americans have already reached adulthood before they have to do any of the things listed above. If you take these simple steps with your teen, they’ll be getting a major leg up on their peers. By the time they’re ready to head out into the real world, they’ll already have a solid grounding on financial topics, giving them a better chance for success. And remember that your financial education doesn’t stop when you become an adult. Phil Cannella has long list of consumer tips and other information about retirement planning that could help you protect your nest egg from market crashes. Sign up for the Crash Proof Retirement Educational Event nearest you!