Schools go to great lengths to give kids the education they need to become responsible adults, find jobs and build careers as productive members of society. And while much of the information they instill in today’s youth can be very useful to them later in life, one of the greatest failures of today’s education system is that students aren’t taught much in the way of personal finance. Here are four finance tips they should start teaching in schools.
Have Fun and Reward Yourself
The first piece of advice when it comes to money that kids almost never hear is that it’s okay to just be a kid and have some fun. It’s okay to splurge a little and get themselves something that they really want. It can be a physical item like a new T-shirt, toy, or skateboard. Or it can be more experiential, such as a video game or a night at the movies, complete with popcorn, candy, and soda.
Live Within Your Means
Kids are constantly influenced by friends and advertising from TV, internet and billboards that make them want to spend money on every new thing that comes along. And then many parents go the other way and constantly tell their kids that they can’t ever afford to buy anything fun at all. Instead, it would be great if kids were taught how to balance needs and wants and how to budget and save for both.
Start Investing Early
Most young children aren’t taught anything at all about investing for their future. Instead, schooling focuses more on teaching kids how to grow up to become good workers who can pay their bills and maybe go on vacation once a year. Students of all ages need to be taught how to invest their money in the stock market, real estate and even hands-on business opportunities in age-appropriate ways. The sooner they start investing in responsible ways, the better off their finances will be in the future.
Start Building Credit Early
Many adults today think of credit cards and debt as a type of evil from which kids should be shielded at all costs. And as a result, many young adults head out into life without basic finance skills and knowledge about how to responsibly use and manage debt. They discover too late that it takes time to build good credit, and that will make it much harder for them to:
- Get a cell phone
- Rent an apartment
- Buy or rent a car
Even some employers require applicants to have good credit, so building credit early is essential.
Schools need to better prepare students for their future by teaching practical financial skills like lifelong investing, managing credit, and living within their means while also being able to enjoy a guilt-free splurge now and then. For more advice on finance or information on proper accounting for your small business, consult with the experts at Woodward & Co. Business Accountants.