Parents, grandparents, and guardians who spend time teaching money-management skills to young people can do those they teach an important service.
The Federal Deposit Insurance Corp. offers tips that may help with the teaching.
For example, help young people open their first bank account. This is an opportunity for them to begin saving and to learn the importance of comparison-shopping. Compare such things as account minimum balance requirements and interest rates.
Ask banks about any special accounts available for young people. Fees might be less or waived on some accounts.
The FDIC urges you to explain the importance of saving for long-term, as well as short-term goals. Encourage young people to “put at least 10 percent of any gifts, allowance or earnings into savings, and consider making your own matching contributions as an incentive.”
The agency notes that spending an allowance is a great way to learn about money management.
Of course, setting a good example with personal money management can help, too. For example, explain why reviewing your monthly bank statements and tracking current account balances are important.
Talk to young people about protecting their personal information from identity thieves. Also, have conversations about the need to have a healthy skepticism about unsolicited offers and sales pitches.
For more information, see the FDIC’s Fall 2012 “Consumer News,” available online at www.fdic.gov.