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Financial Education For Your Kids
In a recent survey of Generation Z (ages 13 to 22), 39% of teens and young adults said they expect to receive an inheritance and therefore don’t need to worry about saving for retirement! However, only 16% of Gen Z parents expect to provide an inheritance — and there’s no guarantee that an inheritance would be sufficient to replace retirement savings.¹
  • Advocate saving. Sixty-three percent of kids 18 and under have a savings account, and almost three out of four accounts were opened before the kids were three.2 Encourage your children to set aside a portion of money they receive from an allowance, gift, or job. Talk about goals that require a financial commitment, such as a car, college, and travel. As an added incentive, consider matching the funds they save for worthy purposes.
  • Show them the numbers. Use an online calculator to demonstrate the concept of long-term investing and the power of compound interest. Your children may be amazed to see how fast invested funds can accumulate.
  • Let them practice. About half of parents give their children a regular allowance.3 Let older teens become responsible for more of their own costs (such as clothing, activities, and car expenses). Running out of funds could require them to think about their spending choices and consider a budget.

Finances may seem complicated, but a little education could go a long way. Do yourself and your children a favor by helping them develop financial awareness.

Sources:
1) Business Wire, August 28, 2012
2–3) Jump Start Coalition for Personal Financial Literacy, 2012

Enhance Your Retirement Education Too

Planning for a better retirement is essential if you don’t want to outlive your nest egg dollars. Get my expert knowledge on retirement planning by listening to my Radio Show “Safe Money Talk”, via online streaming, every Saturday from 9-10am EST on CBS Sports Radio 1580AM OR listen to my Podcasts here.