Empowering Youth: Financial Mastery for The Next Generation

In today’s dynamic financial landscape, ensuring that our children grow up with a solid foundation for their finances is essential. At Hickory Point Bank, we are committed to empowering the next generation to improve their financial mastery so that they can navigate their future confidently. Whether your child is just beginning to understand the value of money or whether you have college-bound kids who will soon be making big financial choices, having the right conversation at the right time is critical for their success!

Early Childhood: Introducing Money Management (5-10)

The Value of Money

At this early age, kids are far from making major financial decisions, but it’s the early seeds that will impact the way they think about money. They can start to learn the basics of money, using coins and bills or recognizing numbers on receipts to help them understand the difference in denominations. You can play simple money games by having them help you tabulate the value of items in your cart or the food that you’ve ordered at a restaurant.

Savings Activities

When cash was still heavily used, this was often done through Savings Jars. Savings Jars are represented by three jars labeled as three categories: saving, spending, and sharing. In today’s digital world, it’s more difficult to manage this process with cash, therefore, we often recommend a physical representation of a youth savings account. For instance, putting a proportionate number of candies in the jars to help teach the discipline of how to allocate earnings or gifts to important categories. This visual and hands on method will encourage your child to grasp the importance of saving and budgeting early on!

Small Responsibilities

Next time you go grocery shopping or to a restaurant, allow your child to assist you with the responsibility of paying for the bill with your credit card. Let them help confirm the total amount. The point is not for your grade schooler to be a math whiz but rather help them understand the discernment and process required for making thoughtful financial decisions.

Middle School: Building Financial Skills (Ages 11-14)

Allowance and Budgeting

At this age, it becomes more appropriate to start providing a small allowance and working with your child to create a simple budget. In this process, you can build on the lessons learned previously and discuss the importance of savings as well as planning for future expenses. Developing a spreadsheet for accountability helps for tracking spending and saving habits.

Bank Accounts

Depending on the size of allowance you agree on, it may be a good time to open a bank account for your child. Many banks provide savings accounts for minors. For instance, Hickory Point Bank offers minor savings accounts for customers under the age of 18 which allows them to start saving for their financial future while still guided and controlled closely by their parents. Either individually or with your personal banker, sit down with your child and help them to understand the importance of keeping track of account statements, interest, and how to make the most of their account.

Budget Challenge

At this stage, your child is introduced to a lot of new financial concepts that can be intimidating at first. We’d encourage that you also make things fun through activities like savings challenges, having your child save towards a specific goal, tracking progress, and then celebrating when they reach their goal to reinforce positive financial behavior.

High School: Preparing for Independence (Ages 15-18)

Part-Time Jobs and Income Management

As your teenager starts earning money on their own through part-time jobs, it’s time to discuss the importance of effectively managing their income. Begin by helping them with setting up a more detailed budget that includes saving, spending, and maybe even investing a portion of their earnings. Investment concepts are not critical but introducing the power of interest through products like a Certificate of Deposit (CD) can give an early introduction to the power of compound interest.

Understanding Credit

At this age, your child probably has a minor savings account and even potentially their own debit card. As they approach 18, it’s important to begin the discussion with them about the way credit can be effectively leveraged or irresponsibly abused. Discuss with them the significance of a good credit score and how it affects their financial future.

Simulated Budget

Create a budget exercise with your child where your teen must manage a monthly budget based on hypothetical income. Give them figures for rent, utilities, groceries, and entertainment. This practical exercise can help them to understand clearly real-world financial responsibilities they will soon face as well as the income limitations they might face as their spending obligations increase. Hickory Point Bank has student budget tools that can help.

College and Beyond: Achieving Financial Independence (Ages 18+)

Advanced Budgeting

For college students, budgeting isn’t just a learning activity, it’s crucial for their day-to-day. Prior to and in the first few months of college, it helps to work with your child to diligently list sources of income (part-time jobs, student loans, parental support) and the, even more diligently, all the expenses (tuition, books, rent, food).

At this stage, encouragement is critical. Your child may be wanting to exercise even more independence over their financial management so, plant the seeds early and demonstrate from the beginning you’re there as a financial partner. In addition, it might be helpful to suggest to your child that they work with a personal banker who can continue to give them advice as their situation changes.

Student Loans

Educate your child about the responsibilities that come with student loans. Most colleges also have great resources to work with students on how to understand borrowing limits, interest rates, and repayment plans. It’s important they can make their own decisions around only borrowing what is necessary and understanding the implications of long-term debt.

You may wish to share some of your personal experiences with budgeting, debt repayment, and financial management with your child. As they become more independent, they will want to increasingly make their own decisions with regards to financial management. Hopefully you will start to see the fruit of your investment in their financial mastery!

Supporting Your Child’s Financial Education

At Hickory Point Bank, we offer resources to continuously support you and your children in improving financial mastery at every stage. Our youth savings accounts are designed to help young savers get an early start and our personal bankers are always here to help discuss how to improve personal financial management.

By addressing financial mastery at every stage of your child’s development, you can be sure that you have equipped them with the knowledge and skills they need to make informed financial decisions for a lifetime. Together, we can empower the next generation to achieve financial success and security!

For more tips and resources on financial literacy, visit Hickory Point Bank’s website or contact us directly at your nearest branch. Let’s take the journey towards financial empowerment, hand-in-hand!