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Does Your Teen Need
a Financial Reality Check?
Is your teenager in need of a financial education? If your child
is like most American teens, the answer is yes. A recent study
revealed that most U.S. teens are uneducated when it comes
to personal finance.*
Although most teens believe they will
achieve financial success, they have no
concept of how to reach such goals.
Optimistic but Lofty Expectations
Eighty-eight percent of teens
look forward to attaining financial
independence. The vast majority
predicts they will be free of any
parental monetary support by age 25
and expects to earn six-figure salaries.
Although there is nothing wrong with an
optimistic outlook toward their financial
future, it is extremely important that
today's youth are prepared for the
complex financial decisions that will
affect them for a lifetime.
What They Don't Know
Young adults are among the
fastest growing groups filing for
bankruptcy today. This is largely
due to overwhelming debt from
credit cards, student loans and
extravagant purchases.
According to the survey, less than half
of teenagers know how to budget their
money. Alarmingly, only 34% know how
to pay bills. A mere 26% understand
how credit cards and interest work
and even fewer know how taxes
function or what a 401(k) plan is.
The lack of understanding regarding
these basic building blocks of personal
finance underscores the need to
educate teens.
Looking to Their Parents
The good news is that teenagers
want to learn more and be involved
in their personal finances.
- Lead by example. Although
it doesn't always seem like it,
children really pay attention to what
you say and do. Be responsible
with your money, and they will
likely follow your lead.
- Encourage attainable goals.
Take note of the small, everyday
accomplishments that help shape your teen's reality. Reward your
teen for paying debts on time,
saving money for important
purchases and balancing his or
her checkbook. These simple
accomplishments reinforce
maintaining good credit and
building savings.
- Be honest. Just because you
are a role model does not mean
you have to seem infallible.
Share your financial mistakes and
consequences with your children.
Being honest with your teen can
build a level of respect for you as a
parent – and lend credibility to the
lesson you are sharing.
It is crucial that parents play an
active role in ensuring their children's
financial maturity. Help your teens
understand investing, saving and
planning for their future now so
they can avoid the consequences
of financial ignorance later in life.
Start educating your teen now.
Open a Great Basin checking or
savings account for your teen! Go
to www.greatbasin.org to learn
more about teen checking and
savings
accounts today.
Young adults are among the fastest growing groups
filing for bankruptcy today. This is largely due to
overwhelming debt from credit cards, student loans
and extravagant purchases. |
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