In today’s fast-paced and ever-changing world, financial literacy —knowning how to handle money — is more important than ever. In a recent study by Bank of America, researchers found that with today’s high cost of living, almost half of Gen Z is still financially dependent on others. While financial literacy is an important everyday skill, schools have only recently begun to add it to basic course learning. Tennessee is one of the select states that requires students to take a financial literacy course to graduate from high school.
Many parents and educators struggle to find the best ways to teach children how to handle money. I believe that fostering financial literacy at an early age is key to building a generation of financially responsible adults.
Here are a few tips for teaching financial concepts to children and teens that will set them up for a lifetime of informed, confident decision-making.
Start early
One of the best ways to ensure children develop strong financial habits is to introduce basic concepts of money and budgeting as early as possible. Even at a young age, kids can begin to understand simple ideas like the value of saving versus spending. Begin by explaining where money comes from, why we need it and how it can be exchanged. Using language that fits the child’s age can make these concepts easier to understand. Talk about “saving for something special” or explain how “buying today means you can’t buy other things until you have more money.”
Add lessons into everyday life and lead by example
The best way to teach kids about money is by adding financial lessons gradually into everyday life. Shopping for groceries, setting a budget for a family outing, or even saving for a toy offer perfect opportunities to discuss money. Hands-on teaching during real life events increases your child’s understanding without formal lessons.
Use community resources and programs
Many organizations and programs offer financial literacy resources to help children, families and schools. As part of our longstanding commitment to supporting economic opportunity and local communities, Bank of America invested nearly $1.4 million across Memphis last year through grants, sponsorships and other support to help the city thrive and address education, workforce development and affordable housing. Our efforts reflect the bank’s commitment to addressing critical issues by partnering with local leaders and groups to support entrepreneurs, build job skills, support basic needs and create opportunities to help people succeed.
Check with your financial institution to see if they have resources that make it easier to teach your children financial literacy skills. For example, Bank of America recently launched SafeBalance Banking® for Family Banking, a bank account that offers parents tools to help their children practice good financial habits and learn to manage their money through an easy-to-use, secure online account. The accounts can be opened through Bank of America online banking or the mobile banking app. It allows you to oversee your child’s spending and supervise the account while teaching your child how to manage a debit card.
Financial literacy is a vital skill that can set children up for a successful future. Let’s work together — families, educators and community leaders — to prioritize financial education and help children build the foundation they need for a lifetime of smart financial decisions.
Trevia Chatman is president of Bank of America Memphis.
