How to raise a financially literate child

Program awards teens for hitting money goals

Receiving money to learn how to manage it sounds too good to be true.

But that’s exactly what nonprofit SecureFutures provides to teach teens financial literacy.

An event at Messmer High School last month celebrated 112 teens who completed the organization’s program called Money Coach.

SecureFutures awards scholarships of up to $350 through the program. Participants, who range from 16 to 18 years of age, receive the scholarship money in installments over the course of the semester for hitting different milestones such as opening a bank account, creating a budget and tracking their expenses.

“We believe that every student needs

to have a bank account,” president and CEO Brenda Campbell said in an interview, “That’s how you get in the game. That’s the starting point.”

The program, which emphasizes the importance of starting early, setting goals and monitoring spending habits, partners with schools and community organizations to teach teens about personal finance.

SecureFutures gave participants a little over $72,000 this school year, $34,000 of which was to the teens in the spring semester, who were honored at the event.

Campbell hopes the teens make some financial mistakes in the program while they have a coach checking in with them.

“We don’t think these students are going to take the $350 and put themselves through college,” Campbell said. “We’re putting money in their hands at a time when they have a trusted, caring adult looking over their shoulder.”

Campbell said Money Coach is a great supplement to personal finance courses in schools, but isn’t enough on its own.

Financial literacy at home

Wendy Pitlik-Plehn, a family and consumer sciences teacher at Sheboygan South High School who has been teaching personal and family finance for more than 20 years, shared a few things parents can do to raise kids who are more financially responsible. Modeling a mindset for financial success is one of the most important things parents can do, Pitlik-Plehn said in an interview. The following is a list of ways she said parents can do that:

❚ Talk to your kids. Start having discussions about money as early as they can understand. Using phrases such as “We can’t afford that right now” or “We’re going to have to save up for that” are good ways to introduce responsible decision making.

❚ Pay with cash. This shows that you only spend the money you have and respect a budget. Use credit wisely.

❚ Read aloud to your kids. PitlikPlehn recommends books such as “A Chair for my Mother” by Vera B. Williams, “Arthur’s Funny Money” by Lillian Hoban, and “The Berenstain Bears’ Trouble with Money” and “The Berenstain Bears’ Dollars and Sense” by Stan and Jan Berenstain. These books introduce some important concepts about managing money in ways that kids can understand.

❚ Help your kids set goals. This can be useful when kids start asking for things. “If you set goals with them they can very quickly see the reward of their efforts,” Pitlik-Plehn said. For younger kids, setting short-term goals for purchases is best. For older kids and teens, setting summer earnings goals or scholarship money goals makes more sense.

❚ Give an allowance for the work they do. Kids can understand goal-setting better if they can work toward what they want. Reward-based allowances that give kids money for specific chores they do instead of just giving them a weekly or monthly allowance will help show them the more they work, the more money they’ll make.

❚ Encourage school districts to do more. In December 2017, Gov. Scott Walker signed legislation that requires public school boards in the state to adopt academic standards for financial literacy and incorporate instruction in personal finance into the curriculum from kindergarten through high school. However, “Each school district can interpret that their own way,” Pitlik-Plehn said. Parents should contact their school districts to find out what personal finance requirements their kids will have and encourage their school districts to have a required course for all students.

A challenge for teens

Ryan Graham, who went through the Money Coach program in 2015, spoke on a panel of alumni at the Messmer event.

“I just wanted to let them know that they’re still young and they’re going to make financial mistakes and that’s OK,” he said in an interview. “I think the important thing is knowing how to come back from that.”

Graham noted one of the main challenges while he went through the program was not only learning how to be financially responsible but also “getting your friends and family to do the same thing,” he said.

The difficulty Graham faced is echoed by Campbell, who also identified this as a problem teens in the program face. Many participants in the Money Coach program come in without a bank account, she said. Many come from families that don’t have bank accounts, either.

After completing Money Coach, Graham said, he started paying more attention to how he spends his money. He is going into his sophomore year at St. John’s University in Minnesota and works two jobs.

While teens come in without bank accounts and healthy spending habits, the outcomes of the program show positive results.

SecureFutures’ data on teens who completed the program in the past 4 1/2 years reports that 56% of those participants came into the program without a bank account and all of them left the program with one.

The data also shows that 36% of teens came into the program without ever tracking their expenses. After leaving the program, 94% of them reported tracking their expenses.