Aaron Iffland, Private Banking, Personal Services & Jeremy Zeisloft, SVP, Commercial Lending
Your school shopping list is all checked off – but are your students equipped with the financial education basics needed to succeed at school and beyond?
According to the Financial Industry Regulatory Authority (FINRA), only 34% of Americans can answer at least four of five basic financial literacy questions, while USA Today reports only 31% of young Americans agree that their school education did a good job of teaching them healthy financial habits.
Whether their goal for the 2021-2022 school year is to earn their diploma or simply master those ABC’s, we’ve got several recommendations to help earn straight A’s for your student’s personal financial know-how.
Any task with your children can become a teaching moment. Start by discussing wants vs needs or even counting the items you pack them for lunch.
The Building Blocks | Kindergarten through Middle School
Studies show that children learn best when engaged and active. Make learning about money fun, through activities your children already enjoy.
Dig out your board games like Monopoly Jr. or the Game of Life to introduce concepts like saving money for future goals. If books are more your speed, start with picture books like “Alexander, Who Used to Be Rich Last Sunday” by Judith Viorst and move up to “How to Turn $100 into $1,000,000” by James McKenna and Jeannine Glista, which teaches kids how to save for goals, scoring their first job, and more.
Board games are a great way to get your little ones thinking about money and making choices.
You can also get your kids involved through real world examples, like a trip to the grocery store. This can be an important teaching moment for wants vs needs, the different types of money and payment options a shopper can use, and shopping for deals with coupons or store specials. Coupons can also be a great way to teach savings and may create an opportunity to set aside the money saved into a 529 plan or separate savings account for kids.
Fortifying Your Foundation | High School
High school leads to first jobs and banking relationships. Take a trip down to your bank and help your student set up a new account – if under the age of 18, you as their parent will need to be on the account too. Working with your banker, help your student leverage online and mobile banking tools, direct deposit, and even set up automatic transfers into their savings accounts from their paycheck. Teach kids that “X” amount should go to checking for everyday needs and the rest into savings. It may seem small, but even seeing how an ATM works or how to write a deposit ticket can help them later down the line.
Your student can also start to build credit when they turn 18 and parents should stress this is an important part of their young adult’s financial journey. Start small with a low limit credit card and have them use it to pay for their cellphone bill or Netflix account. Building a credit history with no late payments will help them have a healthier credit score and position them better for future expenses like a car loan.
Those overpriced energy drinks and coffees add up – make sure your student’s spending isn’t controlling their lives.
There are a lot of things kids may want to splurge on like overpriced lattes, new cellphones, designer clothes, etc. and it all adds up. While they can treat themselves occasionally, make sure your student’s spending isn’t controlling them. Teach them that they should only be using their card when they have the ability to pay it off at the end of the month to avoid the additional interest cost. While debt may not be fully avoidable, educating your child about it now will help them better understand how it works and how they can successfully manage it.
Standing Strong | College
For many, campus life is their first time away from home. If your student has never been in charge of handling their day to day living expenses, they could be in for a shock.
Now more than ever, countless transactions are being conducted at the speed of a click. It is a good idea to get your student in the habit of checking on their accounts regularly or setting up instant alert notifications. This will help to catch fraudulent transactions, not letting them become dated and ultimately missed in your student’s account activity. Want to get started? Waterford currently offers notification tools like Notifi and Card Valet to help you get account and debit card transaction notifications in real-time.
As there will be a long line of credit card companies looking for those new college freshmen at orientation, remind your student
s to not be tempted to sign up for a credit card or some other store card to get a free gift (like trendy collegiate apparel) while on campus. They should always check the rates and legitimacy of a financial entity before giving out their personal information.
With college being many students first time away from home, don’t let their inexperience make them easy prey for predatory vendors looking to sign them up for overpriced credit cards, phone plans, or other items they don’t need.
Physically securing their financial and personal information is another important aspect of your college student’s successful campus career. Guide them to find a secure area in their dorm or apartment where they can stash their wallet and valuables while away from their room or sleeping. They may trust their roommate, but how well do you know their friends who visit?
Having a financial safety net is another essential part of being independent. In order to prepare for emergencies and avoid unexpected debt, teach your student (or soon to be grad) the habit of always setting aside a part of their paycheck.
As school bags are getting packed and student meal cards are being loaded with money, take these parting tips from our bankers.
“Financial literacy is a learned skill that comes from time and experience,” says Aaron Iffland, Private Banking, Personal Service. “It’s important to think before you spend and to be involved with as much as you can when managing your finances. If you find a word or concept you don’t understand, use online resources to quickly understand it – do not let it be something you continue with if you aren’t fully aware of what’s involved.”
“It is never too early to understand the importance of savings and to start that education sooner rather than later,” added Jeremy Zeisloft, SVP, Commercial Lending. “Make sure you, as a parent, are having the necessary conversations in advance and educating your student(s) on the importance of managing money.”
Remember, financial literacy is 20% knowledge and 80% habit. No matter what grade your student is in, utilizing some of the tips above will help them build important skills and form healthy financial habits that will last them generations.
About the Authors
Aaron Iffland works in Private Banking, Personal Services at Waterford Bank, N.A. in Toledo, Ohio. As a recent graduate of Lourdes University, he is aware of the financial trials facing today’s students and is ready to help them prepare for and overcome them.
Jeremy Zeisloft is a Senior Vice President of Commercial Lending at Waterford Bank, N.A. in Toledo, Ohio. Aside from volunteering his time to teach financial education through Junior Achievement, he is a father of three and is sending his oldest off to college this year.
If you’d like to connect with Aaron or Jeremy, please contact us here.