Since we decided to embark on the journey of Copper, we have had the opportunity to speak with thousands of teens and gain their feedback on our product as well as financial literacy concepts/content to help guide our vision moving into the second half of 2020. We have spoken with some incredible financial experts in both the corporate world as well as academics and certified “money coaches” to ensure that we are delivering these concepts in the most robust, yet consumable way. From these conversations we have distilled a list of the top 5 financial concepts that we believe every teen should know. Check it out!
Banking Basics: Checking and Saving Accounts
We have distilled that the foundation of a sound money management background begins with knowing and understanding checking and savings accounts. We highly recommend that you talk to your teen about the purpose of each. Discuss interest rates, minimum balances, overdraft consequences, ATM fees and the benefits of each type of account.
Creating and sticking to a budget
If a teen has a cash flow from a part-time job or an allowance, set up a budget that documents how much money is coming in and how much is designated for savings and spending.
If you have one, either on paper or in a system, show your children your own budgets. If you aren't comfortable with divulging their own finances, you can also create a fictional scenario of an income and living expenses for teaching purposes.
Review the benefits of setting up a budget and, more importantly, sticking to it. It’s a simple way to convey a wide range of benefits including saving, tracking discounts and long term financial planning.
The Real Cost Of Life
In an increasingly cashless society, it can make it hard for teens to understand the true cost of their spending. We recommend that parents take the time to walk their teenagers through their financial transactions and really dive into how small changes in their financial interactions can pay out long term.
How To Read A Paycheck/Check
It's important to show children the source of the funds that cover all those credit card swipes, bill payments and cash injections.
Teaching a kid how to read a paycheck can also avoid future head scratching when the first one comes in and it's a lot less than what they expected. Walk your child through the different forms of taxes that might cause these deductions to their paycheck. E
Additionally, it can be very helpful to teach your child how to write a check. We believe that it is still very important to master the basics to fully understand and utilize digital banking features.
The Difference Between “Good” And “Bad” Debt
Debt can be a necessary part of adulthood, but it is very important that parents teach their children how to distinguish the "good debt" from “bad debt”.
Money borrowed at a relatively low interest rate that helps you grow wealth over the long run -- like a mortgage or a student loan -- is considered good debt. High-interest consumer debt is the "bad" kind.
We continue to make huge strides on the Copper app and cannot wait to show you what we are working on. In the meantime, we will continue to roll out educational resources like our Cheat Codes YouTube Channel where we review bite sized financial concepts. We continue to build Copper with financial education as the cornerstone of everything we do and continue to push toward our goal of preparing upcoming generations for their financial futures. We look forward to going on this journey with you.
Growing up in a financially struggling home, for instance, a teen or young adult might develop behaviors related to overworking out of the fear of going broke. Money disorders may also come in the form of anxiety or extreme concern about the financial impact of recent events, which many of America’s teens are going through today. If you suspect that your teen has a money disorder, the first step to helping them is recognizing the signs.
Actions Speak Louder Than Words: 5 Money Mistakes You Should Stop Doing
When it comes to teaching kids positive financial habits, actions speak far louder than words. It's important to not only talk to your kids about financial topics but to see these topics enacted in your everyday life. Practice what you preach and don't let your kids catch you making these money mistakes.