Teaching Teens Financial Literacy
April 8, 2021
Former Federal Reserve Chairman Alan Greenspan once stated, "Financial education is a process that should begin at an early age and continue throughout life. This cumulative process builds the skills necessary for making critical financial decisions."
At New Tripoli Bank, we understand the importance of helping our community's youth establish a strong financial foundation where they can understand basic concepts like budgeting, simple interest, and establishing and maintaining good credit and synthesize those concepts into good financial choices.
According to the Council for Economic Education's 2020 Survey of the States, only 21 states in the U.S. require high school students to take a course in personal finance in order to graduate. While this is an improvement since the CEE's first survey in 1998, there remains a sizeable financial education knowledge gap.
New Tripoli Bank believes that financial capability education improves the financial health outlook for our youth and prepares them for unexpected financial situations. It is important that young adults know what to expect from significant life milestones like paying for college, purchasing a home, opening a business, or building a nest egg. To that end, New Tripoli Bank works in association with Cemark to provide financial literacy resources to local schools around the Lehigh Valley.
For Financial Literacy Month, New Tripoli Bank wants to offer the following tips to students and their parents on how to shore up money management skills and prepare for the post-graduate workforce:
- Set Specific Measurable Attainable Realistic Trackable goals. Prioritize achievable savings goals—whether it's saving for a computer or building an emergency fund—and make sure saving for that goal fits within your means. Create a plan of action and follow up by measuring your progress over time.
- Start a savings account (if you don't have one already). New Tripoli Bank offers automatic transfer services to move a set amount from your checking account to savings so you can save monthly without having to remember yourself.
- For working-age students, consider part-time or seasonal employment. You will learn more about personal responsibility and have an opportunity to practice managing expenses.
- Track your spending and avoid making impulse purchases. Create a budget and review it periodically to make necessary adjustments.
- Gain perspective about risk and reward. Knowing how stocks, bonds and mutual funds can affect an investment portfolio shows you how financial decisions can grow—or shrink—your savings. Some high school classes and financial literacy-based websites, provide simulations of how these investments work in the real world.
- Learn about credit scores—a representation of your financial past, present, and future. New Tripoli Bank can offer tips to help you establish and maintain good credit.
Having the knowledge about how to best manage your money is just the start. When young adults practice proper money management techniques early, they're more inclined to make effective financial decisions throughout life. The sooner your children start to grasp these concepts, the more apt they'll be for a better financial future.