One of the most valuable skills young people can acquire from early forays into the workforce is the ability to manage their own money.
“Summer income gives a great intro to something they’ll have to do for the rest of their lives,” says Dan Crimmins, founder of DPC Wealth Management in Ramsey. “The first step is determining financial goals. Who is paying for college? What are their long-term saving goals? Then think about investing. Maybe start with a one-year CD. It’s a big deal for kids to leave money untouched for a whole year, but it can stress the point of the compounding effect of saving—earning money without doing anything.”
Since 2004, the state’s core curriculum has included personal finance and consumer education. Organizations such as the New Jersey Coalition for Financial Education, a nonprofit with a member base of government agencies, schools, and businesses, provide resources for educators and consumers. NJCFE promotes financial literacy from “cradle to grave,” says coalition president Maryanne Evanko. The NJCFE website offers articles, links, and interactive discs for purchase. Real Money… A Financial Simulation for Young Adults, presents financial scenarios that create “a reality check prior to entering the world of work and high school,” says Evanko.
“The key is learning to have a balance between what you spend and what you save,” says Crimmins. “Don’t teach kids to save everything. Enjoy the fruits of labor, but realize that saving is a must.”
TIPS FOR PARENTS:
Emphasize the long-term impact of credit history. Bankruptcy stays on your credit record for seven years.
Insist teens have a steady income before getting a credit card. Generally, the younger you are, the higher your interest rate.
Be cautious when cosigning for credit cards or loans; defaults can negatively impact your credit.
Check out njcfe.org and jumpstart.org, a personal finance site for students.