WHAT YOU KIDS NEED TO KNOW BEFORE LEAVING THE NEST!
While it might seem like a while before your kids leave the nest (or maybe you’re ready for them to fly now), it’s important that they gain financial knowledge so handling money matters when they’re on their own doesn’t leave them feeling helpless. Balance, our financial education partner, has great information to make the transition from teen to adult easier.
Here are FOUR money topics every teen should learn about before venturing out on their own:
- MONEY MANAGEMENT – The first step is to think about what you want or need and how much it’s going to cost. Write down your goals and estimate the amount of money it will take for each. Next, create a budget by looking at your income and your expenses. In simple terms, a budget is adding up all the money your receive in a month and subtracting all the expenses you have. Any leftover money is your “disposable” income, money you can spend freely. It’s always a good idea to include savings in your monthly budget. And most important…do not spend more than you make!
- BUYING A CAR – Buying a car can be one of the biggest purchases you’ll make and one of the most confusing. First, you’ll need to figure out how much you can really afford. Not only consider the monthly payment (if you have a loan), but also consider the cost of insurance, maintenance, gas, and parking fees. Next, when you go shopping, don’t be fooled by advertised monthly payments. Dealers love to post those, but rates depend upon your credit score and income. Compare dealer financing with financing at Ironworkers USA Credit Union. Getting pre-approved at your credit union even before you go shopping will keep you within budget and gives you confidence when you are making a deal.
- CHECKING & SAVINGS ACCOUNTS – These are the bread and butter of your financial life. Having a savings account is a critical method for saving for emergencies or for planning large purchases. Get in the habit of putting money into your saving account from every paycheck. It will add up quickly. Checking accounts allow you to pay your bills quickly and easily, but they require more attention than a savings account. It’s important to be careful with your checks and ATM or debit cards. They are like cash. If someone gets a hold of them, they can take money straight out of your account. Using online banking and mobile apps are great ways to track your spending and watch for fraudulent charges.
- CREDIT CARDS – Credit cards are a valuable financial tool if they’re used responsibly. Credit cards can allow you to build a positive credit history and that can help you rent an apartment or buy a car. If you abuse or misuse your credit card, you may feel the effects of it for many years. The best rule of thumb is to use your credit card, but pay it off every month so you don’t accrue interest payments.
Visit Ironworkersfcu.balancepro.org and search “Teen and Money” for more valuable articles, podcasts and videos to help your teens get ready for adulthood.
Membership in Ironworkers USA Credit Union is open to all family members of our Union Ironworker members. Joining is a great way to get your kids started on the path to financial freedom! If you’d like to open an account for a member of your family, give us a call at 1-877-769-4766 or visit apply online.