Q&A with Becky Franklin
Banker stresses importance
of financial education for kids
Q: Why is it so important to educate children about money management?
A: According to a 2011 survey of high school seniors, 87 percent report that their parents are their primary resource for information about money management and personal finance issues, but only 22 percent report that they talk to their parents about money management “frequently.” Much like the “birds and bees” talk, children desperately need guidance from their parents in order to learn appropriate money management skills.
Q: What are the key issues parents need to address?
A: It seems simple, but reinforce that it is important to earn income and live within those means. This may include waiting to buy until the money is available and often involves making difficult choices about how to spend money. Encourage that they put money into savings frequently and help them with setting realistic savings goals. The sooner they start saving, the greater progress they'll make toward building good habits. Ensure they know a credit card is like a loan, interest will cost them more in the long run, and they should only use credit cards when necessary. Discuss wants versus needs in using credit for purchases. For older teens, make sure they know how necessities like taxes, insurance, utilities and interest on credit cards and loans are less obvious, but unavoidable, costs they should be prepared for.