What's the Best Way to Teach Financial Literacy for Teens?
Financial literacy is a core skill for people of all ages, but it is critical for teenagers. As they take on more financial responsibilities and make important decisions about their future, it's imperative to have them learn a thing or two about money.
However, teaching financial literacy for teens can be challenging, as they may not have much experience with money management and may not be motivated to learn about financial concepts.
So, what is the best way to go about teaching teenagers about managing money and personal finances?
In this article, we will explore different approaches and strategies for teaching financial literacy to teens. In addition, we will provide tips and resources for educators, parents and other adults who want to help young people develop strong financial skills and knowledge.
Whether you are a teacher, a parent or simply someone who cares about the economic well-being of young people, this post will provide valuable insights and guidance for promoting better financial management skills among teens.
Financial Literacy for Teens: Why it Matters To Personal Finance?
Teens encounter many financial decisions and responsibilities as they transition into adulthood. For instance, they may need to budget and manage their spending, save and invest for the future, use credit responsibly and understand the financial implications of different choices and decisions.
Besides the practical benefits of financial literacy for teens, there are also social and emotional benefits. With financial literacy, teens can feel more confident and empowered in their financial lives. Over time, this contributes to a sense of independence and self-reliance.
Bank Accounts and Financial Education
Setting up your teen with a bank account is the first step in teaching them about financial literacy. This way, you allow them to manage money independently while offering solid advice and guidance.
With a savings or checking account, teens can learn to be responsible with their money and understand the consequences of financial mistakes or oversights. For instance, if they overdraw their account or make a late payment, they may incur fees or other consequences, which can help them learn to be more careful and responsible with their money.
In addition, opening a high-yield savings account helps build financial literacy around compound interest and similar financial knowledge concepts.
Teach them About Needs versus Wants
One common financial mistake people often fumble with is differentiating between needs versus wants. In most cases, the line gets blurry, and you can't tell right from wrong. Teens are not an exception.
Teaching them the difference between needs and wants allows them to prioritize their spending and allocate their money to more appropriate needs. For instance, they can focus on meeting their basic needs (such as food, transportation and clothing) before spending money on wants (such as entertainment or luxury items).
Avoiding financial pitfalls is another core lesson in learning about needs and wants. These pitfalls can include impulse buying, over indebtedness to more extreme cases such as financial stress. In the long term, such knowledge helps teens build a solid financial foundation and avoid financial setbacks in the future.
Advise Them on Tracking Expenses
No surprise here: Many teens are barely accountable to their studies, let alone their finances.
Whether your teen has an income-generating activity or regularly gets an allowance, they need to track what they spend.
A great way to achieve this is by setting up a simple budget. At first, it may seem like a lot of work. However, tracking expenses allows teens to see where their money is going and identify areas where they may cut back or save. If they have a smartphone, they can use expense-tracking apps.
Understanding Financial Literacy and Medical Expenses
Medical cost-sharing is an excellent way to go about this; it's less expensive (lower monthly cost) than traditional insurance and programs for both individuals and families.
In a medical cost-sharing program, members agree to share the costs of each other's medical bills. These programs are often less expensive than traditional health insurance.
Teaching teenagers the ins and outs of what it means to belong to a medical-cost-sharing community offers them another way to address medical costs. It involves all aspects of health, including keeping yourself healthy to keep costs down. Teaching young people about healthsharing will not only help them understand the value of a dollar, but also the value of the one life we’re all given.
Liberty HealthShare: An Alternative
Liberty HealthShare is not insurance. It’s an alternative method for paying healthcare costs and medical expenses.
Our programs are geared towards healthy, like-minded people who are looking for a more affordable way to cover medical expenses. We offer medical cost-sharing programs that cater to Christians, as we are a Christian Healthshare Ministry.
The Liberty Rise sharing program was specifically designed for young adults (18-29) who are just starting their careers.
Financial literacy provides the foundation for a lifetime of financial stability and success. It empowers young people to make informed and responsible decisions about their money.
Want to learn how you and your teen can become part of a medical cost-sharing community? Contact Liberty HealthShare today to get started.