Teaching financial literacy to youth: why it helps
Did you know that April was “Financial Literacy Month?” During this month, it’s critical that we raise awareness about the subject of financial education – particularly to youth, who may not receive the same information in schools. For parents of young or teenaged children, the importance of financial literacy is not something to be scoffed at. When we instill good financial habits at an early age, we set up our youth for a lifetime of better decisions and confidence with money.
Here are a few ways we can approach financial literacy with youth.
Tip #1: Always speak openly about finances
It can sometimes feel a bit like taboo, when we avoid conversations about finances with our children. For many of us, we knew nothing about our parents’ finances, which may have consequently inspired an instinct or desire in us to hide the same from the next generation.
It can be detrimental to our youth to avoid speaking about finances. Try to stay very open, especially about how much we make, how much is in our savings, retirement plans, etc. For some families, depending on circumstances, that can be a very awkward or strange thing to do – but it’s critical for raising independent youth. You want them to have the confidence they need to be stable and financially secure all on their own.
We live in a world where money is a part of our everyday – it’s impossible to avoid. Make sure to keep it an open discussion, where any questions are permitted. It can feel strange, but you want to avoid keeping it “secret” so that your children know they are able to engage in invaluable discussions from an early age that helps prepare them for adulthood.
Tip #2: Tell youth about life insurance
Life insurance can be a tricky one to discuss with children, especially because they may worry about the whole “post-mortem” aspect. It’s integral to explain your life insurance policies to your children, what they mean, where the policies are, and what may happen in the event of a guardian’s unexpected passing. In addition, if your children are covered with life insurance policies (namely permanent life insurance policies) it’s important to explain to them that it’s not about the death benefit but rather that they will have insurance for the entirety of their lives. It’s about protection – not a likelihood.
Life insurance is different than other insurance policies because a lot of different types of policies can fall under the bridge name of “life insurance.” There’s term, permanent, critical illness, disability, whole, universal…the list goes on. Talking about it with young people can start the conversation and solidify the importance of having a solution for your loved ones’ protection in the event of the unexpected.
If you personally are still unclear about life insurance and how it may help, Panda7’s life insurance brokers are here to clarify things for you. Discuss with our friendly experts whenever you need guidance.
Tip #3: Teach them about the importance of saving
From an early age, it’s important to teach our youth that money is not an infinite resource, and that there’s a very big reason why we save. These lessons can be a tough one if we’re starting our children extremely young and they’re surrounded by friends who always receive plenty of birthday presents, Christmas presents, etc. – and you’re the parent who is dishing out a little towards physical gifts, and a little more towards your savings accounts (for experiences like university or travelling later in life.)
While it might be a struggle at first, your kids may develop a greater appreciation for building up their savings as they get older. You can arrange to have your kids participate towards their savings to see the benefits themselves. Have them contribute a certain amount towards their savings, which you will then multiply and match by a certain percentage and add to their account.
Resources for youth financial literacy
If you are a parent or a guardian, you should be the no. 1 resource for teaching your children about financial literacy. Of course, that’s not always going to be a hit, so Panda7 has supplied some options for additional resources for financial literacy used by youth. Those may include:
- Money & Youth – A guide to financial literacy intended to change the way that the next generation learns about finances in Canada.
- Managing Money & Understanding Credit For High School Students – a free online course that teaches high school students about the importance of good money management as well as the consequences of bad money management.
- Online Shopping with Confidence – an online course that teaches youth that while technology offers us a lot of convenience, we need to be wise about the way we consider shopping online – including reviewing seller/buyer ratings, fraudulent activity, and more.
- The Gov of Canada Financial Literacy Programs – The government of Canada’s website also offers a number of educational materials for both students and adults to help them increase their financial knowledge and skills.
As you can see, there are plenty of resources available to help support youth’s financial literacy, but it all starts with you! We hope that these tips have opened your eyes about the ways you can teach your children/our youth about the importance of finances and how we can provide them with the skills they need to transform into financially savvy, confident, and informed adults.