DAVE RAMSEY

Do your kids a favor and teach them to be financially literate

Apr 11, 2021, 5:45 AM
(Pexels Photo)...
(Pexels Photo)
(Pexels Photo)

If you guys have been hearing the term “financial literacy” a lot, there’s a good reason — it’s one of the most important money-related topics! And that’s why April has been named Financial Literacy Month.

I’m a huge believer in financial literacy for everyone, but this stuff is especially important if you have kids who are in middle school, high school or college.

Getting the right education about money is a game changer in their future success. Here’s what you need to know about financial literacy.

What’s financial literacy?

Being financially literate means understanding basic money concepts, like budgeting, saving, investing, and beyond. And it’s not just about knowing all the facts when it comes to money. Learning the right behavior is even more important than having the head knowledge.

Why is financial literacy so important?

When you’re financially literate, you know how to avoid the financial problems that way too many people face, like student loans and credit card debt.

You know how to budget, understand investing and insurance, and have an emergency fund to cover life’s curveballs. And when students learn how to do all those things before they have a chance to make mistakes with money, they can head into the real world way ahead of the game. Nice.

How can I help my kids become financially literate?

As a parent, you’re a huge influence in your kids’ lives when it comes to money topics. These questions will help you figure out your own level of financial literacy so that you can better help your kids:

• Do you have an emergency fund of at least $1,000?

• Do you make and stick to a zero-based budget every month?

• Are you debt-free (or getting there)?

• Do you understand how compound interest works?

• Do you know what types of insurance you need?

If you answered yes to most of those questions, your financial literacy is on point. But if you didn’t, don’t stress. Following the Ramsey Baby Steps is a great way to get your finances under control.

You can help with your kids’ financial literacy by showing them how to open a savings account and set money-saving goals. Even with younger kids, include them in your family’s financial conversations and help them divide any money they get into giving, saving and spending categories.

You can also encourage your kids to take a personal finance class if their school offers it. Our Ramsey research team found that students who take a personal finance class are 23% less likely to use loans to pay for college. And 87% of them feel confident about their ability to invest for the future.

Bottom line: Parents and teachers are the first line of defense when it comes to helping young people avoid major money mistakes. But the good news is, you don’t have to have a perfect track record to teach your kids about money.

For more tips on helping your kids become financially literate, check out this article.

Dave Ramsey

(Pexels Photo)...
Dave Ramsey

Dave Ramsey says: Be smart – don’t raid nest egg to pay off mortgages

Being broke, even in a house that’s paid for, isn’t a good idea. Stand down on paying off your mortgages if it means raiding your nest egg.
3 days ago
(Pexels Photo)...
George Kamel

Selling your stuff online is the new garage sale

National Garage Sale Day is coming up. But we live in modern times though, and selling your unwanted stuff online can be way more profitable.
5 days ago
(Pexels Photo)...
Dave Ramsey

Dave Ramsey says: There’s too much risk when entering into debt to a parent

Money has a way of changing the family dynamic, and it’s almost never for the good. I would never tell you to go into debt to a parent as it might jeopardize your relationship.   
10 days ago
(Pexels Photo)...
Dave Ramsey

Dave Ramsey says: Help parents low on cash get financial counseling

Adult children who make good money should help parents in need, but only with the stipulation that they get financial counseling.
17 days ago
(Pexels Photo)...
Rachel Cruze

7 ways for you to have the best budget meeting ever

With skyrocketing prices everywhere you turn these days, it’s more important than ever to take control of your money by making and sticking to a monthly budget.
19 days ago
(Pexels Photo)...
Dave Ramsey

Dave Ramsey says: Debt consolidation is not a solution for credit woes

Debt consolidation companies try to position themselves that way, but they don’t even come close to addressing or solving the real problem.
24 days ago

Sponsored Articles

...
Mayo Clinic Orthopedics and Sports Medicine

Why your student-athlete’s physical should be conducted by a sports medicine specialist

Dr. Anastasi from Mayo Clinic Orthopedics and Sports Medicine in Tempe answers some of the most common questions.
...
Dr. Richard Carmona

Great news: Children under 5 can now get COVID-19 vaccine

After more than two years of battle with an invisible killer, we can now vaccinate the youngest among us against COVID-19. This is great news.
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Update your child’s vaccines before kindergarten

So, your little one starts kindergarten soon. How exciting! You still have a few months before the school year starts, so now’s the time to make sure students-to-be have the vaccines needed to stay safe as they head into a new chapter of life.
Do your kids a favor and teach them to be financially literate