Summer is almost over and parents should be worried, not about back-to-school shopping, but whether or not their children are learning how to budget, save and invest in their futures. A survey released by Visa showed that only 5 percent of adults learned about the vital life skill of money management in elementary or high school - a surprisingly low number.
The Visa survey of 1,000 cardholders also found that less than half of people (48 percent) learned about money management from their parents while 41 percent were self-taught or learned the hard way. At the same time, the survey discovered that 91 percent of respondents said they supported requiring financial education be taught in every high school in the country. Currently just fifteen states have some sort of financial education requirement for high school students.
To help combat our nation's financial illiteracy problem, Visa offers parents, students, teachers and consumers of all ages free access to an award-winning money management program called Practical Money Skills for Life.
"Improving a child's money management skills should be a top priority for parents," said personal finance expert and best-selling author Jean Chatzky. "While schools need to incorporate financial education into their lesson plans, parents also have a role to play. Learning starts in the home, so turn routine financial experiences like back-to-school shopping into educational opportunities by developing a budget with your kids."
Available at www.practicalmoneyskills.com, Practical Money Skills for Life comes complete with a "Back-to-School Budget Calculator," an effective, hands-on tool to teach kids how to prepare a budget and spend wisely. The site also contains three new allowance calculators designed to help parents get a better grip on their kids' spending habits while simultaneously giving their children a solid money management foundation based on the following factors: what parents themselves received for an allowance as children, needs-based expenses versus discretionary spending, and saving for a goal.
Practical Money Skills for Life also helps give educators the tools they need to reinforce this learning in their classrooms. With complete lesson plans tailored for grades K-12 and beyond, the website includes presentation materials, in-class activities, quizzes and more mapped to state educational standards.
Some key back-to-school shopping tips include:
- Have children follow a budget. Stress that getting a more expensive item might mean sacrificing something else.
- Encourage kids to consider ways to cut costs and manage cash flow, like clipping coupons, looking for sales, or buying supplies each semester.
- Teach your kids to comparison shop to avoid impulse buying or paying for overpriced items.
- Differentiate between "needs" and "wants." Ask children to contribute their own money to fill the gap between what they "need" and what they "want."
- Tell kids that if they come in under budget, you will split the savings with them.
- Continue the budgeting lesson by starting an ongoing monthly allowance for your kids.
Practical Money Skills for Life is an award-winning, teacher-tested and teacher-approved financial education program that is available in English, Spanish and Chinese. The program contains three comprehensive sections, complete with money management resources and lesson plans tailored for use at home, in the classroom or at work. It also contains an array of tips to help prepare for life changing financial events, from planning a baby to saving for college and retirement, as well as a number of other budget calculators and interactive games. Visa also runs What's My Score (www.whatsmyscore.org),a leading higher education consumer awareness program. The website guides college students through the ABC's of a FICO credit score, from factors that can lower a score to ways on improving it, at no charge.
Additionally, building on a decade-long commitment to improving the financial literacy of all Americans, Visa USA has joined with Chatzky to promote financial literacy nationwide. Through this collaboration, Chatzky is helping to develop new financial education curriculum and interactive resources geared toward teachers, students, women and parents. She has and will continue to participate in a number of Practical Money Skills for Life and What's My Score outreach activities.