As school has started the idea of teaching financial literacy comes to mind. What do we do to prepare our students for their financial future? Do they understand budgeting, investing and saving? Don’t we have an obligation to teach our children well?
North Carolina schools teach about financial literacy throughout elementary and middle school and require a high school course, American History: Founding Principles, Civics and Economics (which is a more in-depth study) for graduation. These parts of the social studies curriculum cover many principles of personal financial literacy. This is a great beginning, and we suggest that parents augment this with home training and hands-on help with creating budgets and learning about the expenses related to running a household. Sharing information about savings is also important.
How many students understand how a bank works as a lending and savings institution? What are some options for putting money away to save for higher education, vacations, and eventually retirement? Even though these ideas might seem unimportant now, exposure to them at an early age can plant a seed.
Every person who has the opportunity to build a personal budget becomes a wiser consumer. This would be a valuable foundation for future monetary responsibility.
Students can learn about the stock market, mutual funds and other ways to invest for their futures. One exercise that can be done at home is to simulate investing $1,000 in each of five stocks and follow them through a month to see how the youngster’s money grows or shrinks. They could compare how well they did with other siblings and parents. A preliminary understanding of the stock market would be educational. They could learn how easy or difficult it is to pick stocks and gain an appreciation for the benefits of having a financial advisor.
Since investing can be a complex activity, relying on a professional can help. A Certified Financial Planner (CFP) has knowledge about how to navigate the fluctuations in the market and how to determine whether you need long-term or short-term investments.
Les Merritt has been helping families for decades with their finances. As a CFP, he is trained to help you as well. Contact him at (919) 269-8553 to protect your family today and share this education with your children to put them on a successful financial path for their future.