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Why Financial Education Is Important For Children And Young Adults

Why Financial Education Is Important For Children And Young Adults

Financial Education

A young adult gained admission into college to study business administration. Having cleared off all academic expenses, the father of the young man gave him ten thousand U.S dollars for the first semester. In less than two weeks, the young man squandered the money. Well, there is one thing only to infer, he wasn’t financially enlightened by the parents. Excessive consumerism in youth is attributed to the failure of parents to educate their children on how to manage cash.

By and large, there is this big misconception that introducing a child to financing before they cross the teen age is a way to spoil the child or make the child become too money minded. But it is just the opposite. The truth is that breaking a child into financing before they come off age enough to manage big investments and money is the only way to teach a child to be prudent with handling finances.

What is child financial education

The term refers to the effort of parents to familiarize their children with the concepts of cash and investment management. According to Jonathan Bagwell, educating a child as to what money is and how it can be managed efficiently is pretty much like preparing a child for the big financial responsibility of the future that awaits the child.

Most parents does that by setting up an independent account for their children. They do the funding from another connected to the children account. The parents would give their children full access to it. The children would be allowed to manage the account in form of settling certain bills and making payments for stationeries. The account get reimbursed on a timely basis say a week or month. The parents monitor the account and provide support to their children as to how they can manage the money in the account effectively.

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The children are also broken into the culture of saving more than spending. They are trained to understand that the less they spend, the more resources available. For that they don’t run short of finances. For the process to yield the desired result, some parent put less than a child needs in an account and expect the child to manage it to cover their expenses.

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