Financial literacy for kids: Expert's top tips to get started

Summer is beginning to wrap up with back-to-school advertisements making their way across the media landscape. While schools gear up to teach a myriad of subjects, one that is often overlooked is financial literacy.

HBCU Community Development Action Coalition's Our Money Matters program director Sharon Kent joins Wealth! to give insight into where to find financial literacy in schools and at large.

As to how and when to start teaching kids financial literacy, Kent believes parents should start: "Teaching kids the difference between needs and wants, that's always a good thing. And then some things that they can learn in school are understanding the basic value of money. Money is a tool. How do we use it effectively? How do we grow the money? Introducing saving and spending to help the students understand, once they get money, whether it's getting allowances from doing chores at home or even the monetary gifts they get in their birthday cards from parents, how to save that money. And then start introducing some practical skills, such as budgeting."

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Nicholas Jacobino

Video Transcript

Sharpen up them pencils.

It's time to head back to school.

That's right back to school season is here and students are ready to take on core subjects like math, science and language, arts.

And while these classes are a mandatory part of our curriculum, one subject remains absent from many schools, financial literacy for more on financial literacy in schools.

I'm joined by Sharon Kent.

She's the program director for our Money Matters and H BC U Community Development Action Coalition program.

Great to have you here with us.

OK.

So as we're getting ready to go back to school, where are we seeing considerable changes be made to address the gap in financial literacy and, and where do we still have some work to do here?

Sharon?

Well, there's plenty of work to be done, that's for sure.

And I do know that in some states, um the the local governments have mandated financial literacy in some high schools.

But I really believe that um financial literacy begins at home and is um and, and then from home then it's, you know, you, you get more of it as you go to school.

And so uh one of the things that I've seen in my work is by the time students get to college they've missed out on so much financial education.

And um here's some things that as you put up on the screen, some things that the school should teach um to help empower young minds prevent future financial mistakes, which is critical because typically the generation prior to um made a lot of those mistakes and the goal is to make sure that our students today don't make those same mistakes.

And one of the other things that we can do with good financial literacy, solid financial literacy is helping close the racial wealth gap.

So all of those things are important and help uh create an environment where kids can learn more about financial literacy.

One of the things that as we, as you said, as we uh as students go back to school, now, some of the things that um parents can do at home is start talking about finances and make and make personal finance AAA part of the daily conversation, uh when they take their kids to the grocery store and talk about the cost of certain um helping kids understand the difference between wants and needs and things like that.

And so we can start the conversation uh at a very young age and carry it through, through middle school, high school, college and beyond.

And uh so those are some of the things that we can do right now.

What are some of the core financial pillars that should start within the household and then where should schools and programs in their curriculum be picking up on the other side?

Yeah.

So coming up with things, teaching kids the difference between needs and wants, that's always a good thing.

Um and then some things that they can learn in school are understanding the basic value of money.

Money is a tool.

How do we use it effectively?

How do we grow the money uh introducing saving and spending to help the student understand once they get money, whether it's from uh uh getting allowances from, from uh doing chores at home or even um the gifts they, the monetary gifts they get in their birthday cards from parents, um how to save that money and then start uh introducing some practical skills such as budgeting uh starting that at a very young age, middle school, you're looking at maybe opening up a savings account, learning about simple interest and the importance of savings and then having a basic understanding of credit cards and debit cards.

What's the difference?

What are the pitfalls?

What are the advantages of either one if there was one core perhaps?

Uh and, and all of this adds up, right?

It's, it's aggregated to make sure that there's a holistic understanding that someone has by the time they graduate high school and are ready to go to higher education in whatever form that may be could be a vocation or whatever as we're trying to become more perhaps systemic internationally and nationally, specifically.

What is the one big takeaway that every and common understanding that every student should have prior to making that transition into higher education and then later on into just beginning a successful financial life, I think, I think there's, there's not just one thing because the idea of personal finance encompasses many areas.

Um but understanding credit your credit score, the importance of the credit score uh and how it's going to impact your interest rates on things as you as you go into uh wanting to buy your first car, your first home.

Uh and understanding some tools about uh how uh interest rates work, especially on your student loans.

And then understanding investing the difference between the stocks and bonds, mutual funds and being able to make those kind of sound financial decisions that will put you on solid financial footing as you go through college and beyond.

And the bottom line is that all of this education starting from elementary through college will help not only this generation, but the next generation to come, Sharon Kent, program director for our Money matters and H BC U Community Development Action Coalition Program.

Thank you so much for taking the time here with us today.

Thank you.