write. If they're not financially literate, they'll be lost.
That's the advice being offered by The National Financial Educators
Council (NFEC) (www.FinancialEducatorsCouncil.org), organizers of
Money XLive – one of the nation's largest financial literacy event
that brings together celebrities and sport stars to provide youth a
practical financial education in an MTV award show style environment.
According to a survey from CollegeGrad.com, 80 percent of all college
graduates in 2009 moved back in with their parents after graduation, a
three percent increase from 2008 and a 13 percent increase from 2006.
"It's tough out there, and it isn't getting any better," said Vince
Shorb, president of the NFEC. "I'm reading studies that are saying as
many as 80 percent of college grads have to move back home after
graduation. The trend is rising, and it's not getting any better.
Living independently is getting more difficult with each new
generation of graduates, and one of the key problems is that we aren't
equipping these kids with a good sense of how to run their finances."
The NFEC, which helps educators, not-for-profits, schools, community
organizations and parent groups assemble financial literacy programs,
offered some tips on how to teach children financial literacy. They
include:
· Relate Money to Lifestyle. Today's youth are not focused on
just "money." It's what money "allows them to do" that motivates our
children to pick up financial literacy skills. Uncover their personal
dreams and find out how they want to live their day-to-day life. Then
relate their aspirations to how having a financial education can help
them reach their goals faster.
· Help Them Recognize Opportunity. Even though many people are
going through financial challenges now, it is important that we teach
our children how to recognize opportunity. When the economy is in bad
shape is when many financially savvy people are making investments
that will increase their long-term net worth. A simple financial
literacy lesson like a practical understanding of market cycles gives
them the knowledge of how to take advantage of future trends can have
a profound impact on their life.
· Savings Plan. Getting your child, teen or young adult in a
habit of setting financial goals and saving money as soon as possible
is an important financial literacy habit you can help them develop.
Since today's youth are comfortable with technology it is highly
recommended you teach them to automate their savings and budget plans.
· Build a Solid Financial Foundation. Make sure your child has
their checking, savings, Roth IRA and brokerage accounts open as soon
as possible (even if they do not have money to put into their
brokerage or retirement accounts right now). People that have these
accounts open are more likely to save their money and begin investing
at a young age.
· Power of Compounding Interest. Youth gives our children a
huge advantage when it comes to their financial health due to
compounding interest. If you are over 60 years old, if you would have
invested $100 per month in the S&P 500 index starting at 18 years old,
you could be a millionaire now. Don't you wish you fully understood
compounding interest and how to take advantage of it when you were 18
years old?
"Let's face it," Shorb said. "The next generation will be without the
advantages of pensions and Social Security to protect their futures.
If we're going to deny them those tools, we should at least teach them
how to better manage what they earn. That's why the NFEC was created,
and that's the mission of the organization."
About The NFEC
The National Financial Educators Council (NFEC) is a coalition of
leading financial literacy experts and organizations that represent
the best practices in the financial education industry. Serving people
of all ages and backgrounds, the NFEC provides practical financial
education solutions that are engaging and inspire people to take
positive action.
