Is Your Senior Financially Literate?

Angela Steele is the Upper School Guidance and College Counselor at Kingsbury Day School. She teaches Transition Classes on College Prep and Financial Planning to help Kingsbury seniors prepare for life beyond high school. In her blog, she shares advice for the parents of members of the Class of 2016.

Is it safe to say that many high school seniors graduate without having knowledge of financial literacy? Speaking for myself, if I knew then what I know now, I would be in great shape! My goal now, as a college and guidance counselor, is to ready my students for the real world (i.e., life after high school). That could involve college or it could involve working for a paycheck or it could involve both.

Financial Planning Word Cloud

As students prepare for graduation, they should also prepare for independent living and financial responsibility. Financial literacy is the ability to understand how money works in the world. Before heading off to college or the world of work, our young adults should know how to earn or make money; how to manage money; how to invest money; and how to donate money to help others.

At Kingsbury Day School seniors take a transition course that includes financial planning. They begin to develop an understanding of how to get a job as they create their resume and cover letter, practice interview techniques and learn business etiquette. Seniors who know how to market themselves and apply for jobs that match their qualifications are a step ahead of those who don’t. Today’s job market is very competitive and we’re doing our students a disservice if we assume they know what is involved in finding a job.

Budget conceptOnce they get a job, it’s safe to assume that many young adults will focus only on spending the money, money, money! Their next decision shouldn’t be what to buy with their money (tennis shoes? clothing? restaurant meals?); it should be how to allocate that money. Even the first-time job holder needs to know how to budget their money.

Through the financial planning class, Kingsbury seniors learn how to create a budget in order to pay their bills. Most have only the vaguest idea of what bills are; but once they see what living independently is all about, mouths pop open and mumbles begin. One student said, “Oh my goodness, how am I going to live?”

How Will Your Senior Function Financially?

Preparing students how to function financially, before they enter the real world, is as important as preparing them academically to succeed. As the seniors progress through their financial planning course at Kingsbury, they learn:

  • How to look for an apartment that fits their budget
  • How to furnish their apartment on a budget
  • How to grocery shop on a budget
  • How to plan a party on a budget
  • About federal and state income taxes that are deducted from their earnings
  • W-2 Wage and Tax Statements and filing their tax returns
  • Banking skills and the different between banks and credit unions
  • Pros and cons of credit cards
  • How to manage their income
  • Insurance (health and life)

Is Your Child Headed off to College?

If your teen is headed off to college this fall, discuss your expectations regarding payment of tuition and room and board. Will you pay? Will your child pay? Will you both contribute? If your child is expected to contribute any or all of the costs, review their revenue stream and help them to create a budget. If your child is receiving scholarships, financial aid, or student loans, does he or she understand the importance of meeting the terms of the agreements?

Finally, don’t forget to consider and discuss with your child how to budget for other college-related expenses, including:

  • Text books
  • Dorm room essentials (bedding, bathroom items)
  • Personal care items (shampoo, toothpaste, deodorant, soap, etc.)
  • Laundry
  • Entertainment (concerts, movies)
  • Snack food
  • Parties
  • Transportation

The Time to Talk is Before They Leave Home!

If you’re the parent of a teenager, the time to consider your child’s financial literacy is before they head out into the world of college or work. Talking about money is usually a difficult topic for parents; however, bailing your child out of future financial messes could prove to be equally, if not more difficult. Reviewing the list with your teenager might be a good place to start. Don’t be afraid to admit that you’ve made some unwise financial decisions or that you wished you had handled your money better. Nobody’s perfect and our children can learn from our mistakes, just as we can.

If you get stuck or don’t pretend to be a money management expert, there are a number of great financial planning resources available online and in your local library. Helping your child to develop an understanding of basic financial planning will ultimately benefit both of you!

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