There is no question that children in high school need financial training to help them prepare for their future. Managing their own finances is no doubt one of the most challenging endeavors they would have to undertake. From the time they get to college all the way to having their own families, financial management will play a big part in their life.
This can start as soon as they enter college where they start to deal with the notion of student loans. They have not received their first paycheck yet but they are already borrowing money with the promise to pay in the future. Of course, it would be very different if you are able to save for a college fund for your children. However, they will still need to manage their own money in college.
Financial training can be very handy in college but the real test is when they start living their own lives. As soon as they graduate, they now have to start looking for their own source of income. The most usual route is to look for a job right out of college. There are some students though who decide to put up their own business in hopes of being their own boss. This is a more complex approach and their financial know-how must be able to guide them through.
There are schools and even places in the country that are putting in place measures to help teach students about personal finances. Fox Detroit even shares that high school students in North Carolina will be required to take and pass a personal finance class to graduate. This is a good step in order to help these students stay out or weather money problems when to grow up. However, the role you play as a parent is a crucial one. Not only do they spend a lot of time with you but they also see how you manage your own money. That being said, here are a few more important points on why training your children financially is important.
It helps them become more confident in managing their finances
Financial training for your children helps them get used to the idea of managing their own money. The sooner they start with it, the easier it will become second nature for them. The practice you give them early on gives them the confidence to do it on their own in the future. This is a crucial part of the process since you will not always be with them to help them make financial decisions.
This is similar to a sport that you love where the younger you play it, the more confident when you play it as time goes by. The better you become and you get to play it at a higher level. This is usually the route most elite athletes go through but with much more intensity. If you apply the same concept with your children and their finances, they will become confident in managing their own finances when they get older.
If you have never taught them how to create a budget by looking at income and expenses, they would have a more challenging time doing it on their own in the future. The problem is that if they do not understand the difference between their needs and wants, it will be more confusing when they start discerning it on their own. These are just some of the problems you can help them overcome by teaching them early in life.
They can learn from your mistakes
As your children go through financial training, one of the lessons that can immensely help their journey in learning about financial mistakes. You can share your missteps with your children and let them understand the whole process. This can prove to be a valuable insight to give them a glimpse of what can go wrong and how to work their way out of it.
It is not every day that they get to learn about financial mistakes first hand. You can tell them what caused the problem and how you were able to get through it More than having an idea how to solve potential future money problems, there is a more important lesson this gives them. It lets them know that financial problems will come to pass and that they can either learn from it or be buried by it.
This is a delicate balance since you do not want them thinking everything is not a serious matter. On the other hand, you also need to make sure that they do not dwell too much on the mistakes. Redirect their focus on the fact that there is always a solution to financial problems and that they always need to look for the lessons every challenge they come across.
It allows them to start planning for their future needs
Financial training early on also gives them the foresight to plan for their finances ahead. They might not start saving but at the very least, they have an idea about what they need to save for in the very near future. For one, they could start thinking about how they can start saving for their college needs. The cost of attendance keeps on going up leaving a lot of graduates with huge debt obligations before their first paycheck.
As they think about that, they can begin to think of ways to address that need and not rely solely on student loans to get them through. They can begin to save money from their allowance to be used for college expenses. If they decide to take up summer jobs, they now have a bigger goal for their salary and they can save with a purpose.
As they grow up and go to college, the money management training they received from you and even their school can be put to good use. College life is a lot different because they now have to provide for most of their needs themselves. As they identify a source of income, they now need to make sure that they can use this to help them with their college expenses.
Early financial training gives them future direction
Apart from having a plan early on, training high school students early on how to manage their money creates a path for them to take in the future. Take for example their career where it starts from managing student loans not only for college but even possibly for post-graduate studies. They are prepared to take on that route knowing what they need to do to get it.
If they grasp the concept of how challenging it is to buy their own home-based from your experience, they can start working on it early. Apart from probably saving little by little for a downpayment, they can work on improving their credit score. No financial training is complete without hammering down the importance of a credit score.
They now have a reason to pay their bills on time and make sure that they regularly check their credit report. The FCRA allows consumers to get a free copy of their credit report once every 12 months from major credit reporting bureaus. This can help them stay on top of their finances and make sure that they are taking the necessary steps to improve their score.
Financial training for high school students is an important step in helping to equip them for the challenges they will face in the future. Money management is not a walk in the park but with proper understanding a lot of practice, children today can be confident with their finances tomorrow.