Financial Literacy is Key to Effective Money Management for Teens

Former Federal Reserve Chairman Alan Greenspan once stated, “Financial education is a process that should begin at an early age and continue throughout life. This cumulative process builds the skills necessary for making critical financial decisions.”

April is Financial Literacy Month. At Peoples Bank we understand the importance of helping our community’s youth build a strong financial foundation so that they better understand basic concepts like budgeting, simple interest, and establishing and maintaining good credit.

According to the Council for Economic Education’s 2020 Survey of the States only 21 states in the U.S. require high school students to take a course in personal finance. While this denotes a marked improvement since CEE’s first survey in 1998, there remains a sizeable financial education knowledge gap.

Peoples Bank believes that financial capability education, improves the financial health outlook for our youth and better prepares them to tackle unexpected financial situations or prepare for significant life milestones like paying for college, purchasing a home, opening a business, or building a nest egg.

Peoples Bank offers the following tips for Gen Z and their parents to shore up money management skills and prepare for the post-graduate workforce:

• Set Specific Measurable Attainable Realistic Trackable goals. Choose your priorities—whether it’s saving for a computer or building an emergency fund—and make sure they are achievable. Create a plan of action and measure your progress over time.
• Start a savings account (if you don’t have one already). As a service to our younger customers, we waive the minimum balance fee on our Savings Account and Money Market Account for anyone under the age of 21. At Peoples Bank, we make sure that nothing stands in the way of creating a habit of saving while you’re young.

• For working-age students, consider part-time or seasonal employment. You will learn more about personal responsibility and have an opportunity to manage expenses.
• Track your spending and avoid making impulse purchases. Create a budget and review it periodically to make necessary adjustments.
• Gain perspective about risk and reward. Some high school classes and financial literacy-based websites, provide simulations of how these investments work in the real world.
• Learn about credit scores—a representation of your financial past, present, and future. Peoples Bank can offer tips to help you establish and maintain good credit.

Peoples Bank remains dedicated to teaching youth the importance of saving. We have partnered with Banzai to teach financial literacy courses in area high schools. We also present a Teach Children to Save unit to area first graders and have presented units on saving at area high schools.

At Peoples Bank, we make every effort to be a resource where you can learn about saving and what products and services we have to help you reach your financial goals. Having the knowledge about how to best manage your money is just the start. When young adults practice proper money management techniques early, they’re more inclined to make effective financial decisions throughout life. The sooner your children start to grasp these concepts, the more apt they’ll be for a better financial future. Contact any of our Peoples Bank locations if you have questions about how to reach your financial goals and how to start a checking or savings account. We are more than happy to help you!

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