Only one-third of mothers believe their children ages 18 and younger are well prepared for their financial future according to a new study.
McGraw-Hill Federal Credit Union surveyed 300 mothers (polled by Toluna, PLC) and found 49 percent believe their children are unprepared to get a job, 44 percent believe their children will not be able to finance college and nearly one-third feel their children are not at all prepared to save money or live on their own.
Shawn Gilfedder, president and chief executive of McGraw-Hill Federal Credit Union believes the benefits of teaching your children about money management early can lead to a lifetime of good financial decisions.
“Teaching by example is a good place to start," said Gilfedder. “Financial institutions need to offer consumers services that keep up with where they are in their lives. “This includes financial literacy, which means something different to new parents than it does to those with college-age kids. Consumers want to do business with financial institutions that are aware of their changing needs and keep their best interests in mind.”
He suggests that parents involve kids in household budgeting, grocery shopping and even reading bills or statements as a way to get them interested in personal finance.
To help your kids financially prepare for the future, here are some tips from McGraw-Hill Federal Credit Union:
* Set an allowance for kids of all ages. It is not usually a lot of money, but it allows children to learn more about what things truly cost in reality. Nothing makes children appreciate money more than earning their own. It does not take them long to realize that money is much easier to spend than it is to earn.
* Talk about money. Kids are interested in this topic. Share basic lessons on budgeting; banking and saving with “real world” examples such as when you make a major purchase, use a credit card, or pay bills or take money out of an ATM.
* Teach them to budget. When they want to buy something special, give them the tools to earn the money, save the money and make compromises along the way so they have the money when they want to spend it.