San Diego Financial Literacy Center

Teaching Teens Financial Literacy Pays Off in the Future

This post was originally written by Mary Hiers and posted on’s blog site. You can see the original post here.

Today’s schools are starting kids earlier in just about every department: math, science, literature, languages, and so many more.

The idea here is that, since children soak up knowledge faster and more readily than adults, it’s best to get the lessons going at an early age so they’re more likely to retain them into adulthood. In short, taking advantage of wisdom that you learned at age 6 is a lot easier than stumbling onto it at age 26 and playing catch-up with the world. This same philosophy should apply to the financial world as well, particularly savings and budgeting.

Starting Off on the Right Financial Foot

If kids begin the path to monetary carefulness early on, they won’t be so tempted to blow all of their earnings on toys that they’ll never play with, clothing that costs them an entire paycheck, and an overall lifestyle that they can’t afford.

This is backed up by a recent study conducted by financial literacy organizations EverFi and Higher One. They took 65,000 college students, some of which took a financial literacy course in high school and some who did not. They were all given a survey of their financial habits, and the ones who studied basic finance in high school proved to be far more responsible with their cash than the ones who did not.

This shows that, even though they don’t always seem to be doing so, kids do pay attention to what people tell them. So, if you teach them from an early age to not carry too many credit cards, to not buy things that they can’t afford, and to set up a budget that tracks everything that they give their cash to, they’ll probably abide by those rules for the rest of their lives.

And yet, the vast minority of kids take these courses, because the vast majority of schools don’t offer them. Right now, only 17 states require that their high schools offer at least one course on financial literacy. Why the other 33 aren’t interested in doing so is a mystery to everyone. Perhaps they feel that managing money is common sense? Because based on the amount of debt we’ve accumulated and continue to accumulate, clearly it’s not.

Until more schools get with the program, parents should take the time to educate their children on how to manage money, and they can start as early as grade school. It’s actually quite easy to do so.

Make Financial Planning a Family Affair

First, sit them down with you while you work on the family budget and explain, in simplistic terms, what you are doing and why you are doing it. As long as you steer clear of unnecessary financial jargon, your child is likely to understand what you’re getting at. Using a budgeting system, like the one offered by is best for these lessons, as its straightforward setup is easily understood by both children AND adults.

Then, apply this knowledge to their world which, despite being mercifully bill-free, can still be a financially-intelligent one. Have them do chores or sell something useful (lemonade, cookies, crafts) so they can earn cash of their very own. Then, if they want a hot new toy or game, let them know that they will need to pay for it themselves, with their own money. Not only will earning the toy through hard work and not just having it handed to them by their loving parents make them feel good about themselves, it will also teach them not to blow their money on cheap junk if they have something bigger and better in mind.

Kids are smarter than you think, and are always eager to learn more. So why not make their next lesson financial literacy, regardless of what their school system thinks? Sounds like common sense to us.

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