Money milestones
Teaching your child how to use and grow their finances
While personal finance has found its way into a number of schools, it’s not a nationwide requirement. The Council for Economic Education’s 2020 Survey of the States found that only 21 states require personal finance classes for students. However, an even smaller minority of these states, six in total, actually require standalone personal finance courses, while 15 states require personal finance coursework to be incorporated in another class. In states like California, Nevada and even in Washington, D.C., personal finance isn’t included in state standards at all.
10-plus years old
The age of 10 is when discussions about investing should begin, Van Court said.
“You teach them about investment accounts, you teach them about interest, you teach them about compound interest because the only way our kids are going to build wealth and truly have choices in society and freedom is if they are investors,” she said. “You can’t save your way to wealth.”
At around 12, Van Court said budgeting should be reemphasized, not only as a way to save for things a child wants but also as a way to reserve money to invest.
“The more money you spend, the less money you have to invest and grow,” Van Court said.
Teenagers
One of the last money lessons an adolescent should learn is about the benefits — and dangers — of credit cards.
While credit cards can be helpful for establishing a positive credit history and making necessary big purchases, it’s important to keep spending in check, Van Court said. “Credit cards are like a sometime-y friend. They feel good when you go on vacation with them, but when it takes 10 years of minimum payments to pay back that $2,500 vacation, then they feel like a stalker who won’t go away and you just want them to go away.”
Van Court said parents should insist that their teens not take out more credit than they can afford to pay back. “The more credit you have, the further you are from being rich.”
Also, during this time when most of the country has been touched by the economic damage brought on by the coronavirus outbreak, Van Court said it’s essential to teach kids about money so they can weather whatever financial storms come their way.
“Now is the time that we need to be teaching our kids the most about financial literacy,” Van Court said. “You’re not in school all day, but you can absolutely be developing skills because skills are what earn you money, right? So that’s one big lesson. The second big lesson in the time of COVID-19 is they can’t leave the house to spend any of their money, let’s teach them to save it and develop goals … let’s get them to be goal-oriented.”