July 5, 2022

Finance & Economy

Let's Talk About Investment

3 tips to instill effective money management habits in your children

  • Jason Powers is the senior vice president of Administration and Ascend Federal Credit Union.

With the school year having recently started, this is an ideal time for parents to start helping their children learn the do’s-and-don’ts of managing money.

Financial education can dramatically and positively shape a young person’s financial future. It helps teach students the basics of money management – saving, investing, using credit cards and much more – so they can develop valuable habits that can last a lifetime.

Understanding and applying money management practices is critical for young people who may have to make significant financial decisions soon after graduating from high school or college. That includes taking out student loans if they’re going to college or creating a spending plan to manage their money after accepting their first full-time job.

Most high school students and young adults, unfortunately, say they don’t feel prepared. A March survey conducted by ENGINE Insights for Junior Achievement found that 87% of teens agreed with the statement, “Every student should have at least one financial literacy class before graduating high school.”

Tennessee was one of five states to earn a top grade for efforts to teach students financial literacy, according to a report.

Unfortunately, only 38% of teens said they had some sort of financial literacy class in school. In my experience in the financial services industry, I have seen too many people come into our credit union seeking counseling to help get their financial house in order.

Most haven’t had the training that could have prevented many common mistakes— loading up on credit card debt or not having an emergency fund.