If you have a teenager, you know there is nothing harder than getting them to believe you know stuff they don’t. So, as a parent and a financing veteran, how do you pass on your knowledge?
Generally speaking, most teens are more visual learners than auditory learners, so if you talk with them for too long, they’ll soon faze you out. However, the time value of money is the single most important factor for retirement and other big goals down the road, so it is absolutely critical we get these concepts across to our teens now. But how can we do it?
Use Interactive Visuals
The first step to getting across the importance of saving money to your teen is to use an interactive visual. For example, online banking tools like TruePartner Credit Union calculators allows a student to change all of the variables on the interest they get when saving (i.e. principal, annual rate of return, calculation period, etc.) to see different outcomes. By using this tool, you can show teens that if they save $100 per month at 6% interest annually, then they would have $454,401.39 in 55 years. The best thing you can do is let your teens play with it until they own it.
Show Them Your Accounts
This may sound scary to some parents, but showing your kids how you manage your accounts (or at least just one of them) can make them realize the real-world importance of money management. For example, you can teach them about interest rates and how those are set while you search for the best bank account for your bucks. You may also be able to get a free account for your teen by linking it to one of your accounts.
Get Them Their Own Account
If your teen is old enough to have a job and manage a few of their own finances, setting them up with a bank account can be just the hand-on experience they need. Even if they don’t have a steady source of income, you can show them how to deposit into a savings account and what kind of money they can expect to see in it years down the road. Many banks offer student accounts for teens to help them learn real world money management skills. With the right interest rate and regular deposits from their own odd jobs, your teen could be ready to pay for their own college tuition!
It’s going to be tough, no doubt about it. But the rewards your teen will get later on in life from your teaching finance tips in the present will be invaluable. So, if you fail once, try and try again! A review of banking services can be included as part of a financial literacy, consumer education, or practical living skills course.
What types of activities and courses have you used as electives? Leave a comment and we may include yours in a future column!