Orlando, Fla. (Ivanhoe Newswire) — New grads may be ready for the real world, but many aren’t ready for real-world finances. A recent survey found just 38 percent of Americans learn about money from their families and only 15 percent learn it in school. So, what should your grad know before that first paycheck?
The caps are flying, and high school is officially out!
But many grads are still learning the ABCs of money. Studies show 75 percent of teens lack confidence in their personal finance knowledge. Thirty-two percent don’t know the difference between a credit and debit card.
Recent grads should start with making a savings plan. Nearly six in 10 Americans don’t have enough savings to cover a one-thousand-dollar emergency.
“The importance of starting a savings plan starts with trying to establish some type of emergency savings account,” said Joel Garris, President of Nelson Financial Planning.
He says it’s equally important to establish a “debt” plan.
“Because credit card debt these days can often be 25 to 30 percent in terms of the interest cost,” explained Garris.
Some simple steps, help your grad create a budget. Apps like Monarch and Quicken can make the process easier. A common budgeting method involves allocating 50 percent of your income towards necessities like rent, food, and gas, 30 percent towards wants and 20 percent towards savings. Encourage automatic savings, building credit slowly, and most importantly not comparing their finances to what they see online.
“Stay off the internet or social media to help maintain some grounding and perspective as to what your financial picture looks like.”
A few smart money habits now can set your grad up for a lifetime of financial confidence.
Another important lesson for new grads: protect their money. Identity theft affects about one in 20 Americans each year. Experts say teach your teens to monitor their accounts, use strong passwords, and never share personal information online.
Contributors to this news report include: Julie Marks, Producer; Bob Walko, Editor.
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Sources:
https://formwealth.com/how-to-teach-your-grad-about-money/
https://www.cindyguldy.com/resources/articles/financial-basics-for-your-high-school-graduate
