Key Financial Literacy Skills for Teens and Kids
Teaching kids and teens about money is essential for helping them become financially responsible adults. By learning about budgeting, saving, and smart spending early on, they can develop skills that will serve them well throughout their lives. Here are some key financial literacy skills that every young person should learn.
Understanding Budgeting
One of the most important financial skills is understanding how to budget. Budgeting helps kids and teens learn how to manage their money by tracking what they earn and spend. A simple way to start is by helping your teen open a student checking account, giving them a regular allowance and helping them plan how to use it. Teach them to list their income and expenses, set aside money for savings, and make sure they don’t spend more than they have. This practice can help them understand the value of money and the importance of making thoughtful spending decisions.
The Importance of Saving
Saving money is another crucial skill. Explain to kids and teens why saving is important, whether it’s for a big purchase, an emergency fund, or future goals like college. Encourage them to set savings goals and help them open a savings account if they are old enough. Show them how their money can grow over time with interest, making saving even more rewarding. Creating a habit of saving early on can help them become more financially secure adults.
Smart Spending Habits
Teaching kids and teens about smart spending can help them make better financial choices. Discuss the difference between needs and wants and emphasize the importance of prioritizing necessities over luxuries. Help them understand the concept of getting value for their money by comparing prices and quality before making a purchase. Encourage them to think critically about their spending decisions and avoid impulsive buying. Learning to spend wisely can prevent future financial problems and help them make the most of their money.
Understanding Credit
As kids and teens grow older, it’s essential to teach them about credit and how it works. Explain that credit is borrowed money that must be paid back, often with interest. Talk about the benefits and risks of using credit, including how to use it responsibly to build a good credit history. Teach them about the importance of paying bills on time, not borrowing more than they can afford to repay, and understanding the terms of any credit agreements they enter into. A solid understanding of credit can help them avoid debt and use credit wisely in the future.
VCNB Can Help
At Vinton County National Bank, we believe that financial education is key to building a strong financial future. We offer a Passbook Savings account that’s perfect for kids and adults of all ages and a Student Checking account to help your teenager. VCNB also provides financial literacy to students of all ages through programs we take into local schools. If you would like VCNB to speak to your child’s class, please talk with your child’s teacher and ask them to contact a local branch.
Visit VCNBfamily.bank or stop by your local branch to learn more about savings and checking accounts for your kids!