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Today, more than ever before, youths and teens have access to debit cards, credit cards, savings accounts,and checking accounts. Americans at younger ages have the opportunity to engage in financial transactions. Given this increased access to credit and debit, there is an increased need for financial literacy and education among our youth.
Indeed, troubling statistics have emerged revealing that many of our young people understand very little about their personal finances.
 The Jump$tart Coalition for Personal Financial Literacy has found that fewer than 30% of high school students have the chance to take even one week of personal finance training. Of the 4,000 students who took the Jump$tart personal finance survey, 68.1% received failing scores, but a recent survey by Teenage Research Unlimited found that more than 20% of teenagers have their own credit cards or access to a parent's cards. These teens spend almost all of their money (98%), rather than saving it, which shows the urgent need for more financial education.
A financially literate person understands how money works in real life in order to make good decisions about buying, saving, budgeting, investing, and donating. A financially literate youth knows how to create a basic budget, read a credit card statement, and balance a checkbook. He or she also can appreciate the importance of saving money to plan for future expenses. Most children who do learn about financial knowledge tend to get their information from teachers, scouting, 4-H, or other youth programs. Because even the most basic financial education in Ohio 's high schools will not be guaranteed until 2010, however, it is important for parents to make sure they personally are teaching their children the fundamentals of personal finance.
Some important topics to cover include:
- How to save money - Young people need to understand that putting away a little money at a time is the way to eventually buy a car or house and to create a cushion for tough times.
- How to live on a budget - After graduation, will your children know how to create a realistic budget and stick to it? Do they understand the consequences of living beyond one's means?
- How to stay out of debt - Does your child know how to control his or her spending, avoid loan-shark scams and avoid being trapped in debt by high interest rates?
- How to choose and use a credit card - Does your child know how to shop around for a credit card and read the fine print? Does he or she know how to protect the privacy of credit card and personal data against thieves, especially on the Internet?
- How to invest money - Will your teenager enter the working world knowing what the differences are between an IRA, a 401K or a KEOGH? Will he or she be able to make an informed choice about investing in the stock market, preparing for the future, or saving for retirement?
There are many excellent websites that cover basic teen financial education, including:
http://www.mymoney.gov
http://www.jumpstart.org
http://www.teenanalyst.com
http://www.youngmoney.com
Local Youth Organizations that teach their members some financial education:
Boy Scouts
http://www.scouting.org
Girls Scouts
http://www.gsusa.org
4-H
http://www.ohio4h.org/
Junior Achievement
http://www.ja.org
For more information, please visit www.ohiotreasurer.gov or call us at 1-800-228-1102. |
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