Tag Archives: financial literacy

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How can you raise financially savvy children?

With school out for the summer, there’s no better time to teach children about money and finances, experts say.

“By teaching children the importance of opportunity costs at a young age, we can better prepare them to become confident and successful members of our community once they enter the real world,” says Jim Lundy, CEO of Alliance Bank of Arizona.

No matter a child’s age, it’s never too early to prepare him or her for a successful future by building financial literacy skills today. Teachable money moments can happen with kids as young as 3 years old and the sooner parents begin to influence positive financial behaviors, the better the chance kids have to succeed in managing money.

“Kids learn a lot by watching what you do,” says Kelly Kaminskas, senior vice president at FirstBank. “I think a lot of parents make the mistake of sheltering kids from money conversations. It’s important to take them to the bank with you, show them how you save for long-term goals, or explain the difference between funding needs versus wants.  These learning opportunities can be extremely valuable as they get older.”

“With almost everything else, we teach our children by talking as we go about our day,” says Christina Burroughs, managing partner at Miller Russell Associates, “but or some reason, that’s not the case with money or financial issues.”

Burroughs says many people grew up in families where it was taboo to talk about money, others worry that children who know that come from well-off families will lose their motivation, while some parents are reticent talk about finances because they don’t want to burden their children with adult concerns.

“But there is a nice middle ground where parents can talk about concepts without burdening children,” Burroughs says. “It’s really helpful for families to talk about the idea behind economy — that people make things or provide services that other people want or need. Then, expand on the idea that when people buy things, it becomes economy and everyone has opportunity to grow and get better because of that. Parents will be thrilled to see how quickly kids become excited by these ideas.”

Burroughs says it’s safe for parents to start talking to children as early as 3 or 4, as long as the conversation is age appropriate.

“The best thing parents can do is simply talk to their kids about the importance of budgeting, saving, and managing credit,” says Joe Bleyle, senior vice president and director of commercial real estate for Enterprise Bank & Trust. “Specifically, kids can participate in developing the family’s budget and open a savings account with encouragement to save for larger purchases.”

With high-school age kids, experts say the conversations can expand into how to get a job, how to dress to impress in the professional world, how to build a business network and the basic principles of business and entrepreneurial thinking.

“The lessons children learn while they are young will shape how financially successful they will be as adults,” says Michael Lefever, senior vice president and business banking area manager for Wells Fargo. “Just as regular exercise and a good diet are essential for physical fitness, knowing the basics of saving, budgeting and planning are essential for financial fitness.”

In order to prepare children for financial success, Deborah Bateman, vice chairman of National Bank of Arizona, says it’s imperative to show them that money is just paper without a purpose or a goal.

“As parents, the most important lesson we can teach our kids is the value of money, and we can teach that lesson and help our kids create a healthy relationship with money by teaching them to give money ‘purpose,’” Bateman says. “We teach our kids to give money purpose  by teaching them to set goals. As soon as a child can articulate their goals, we should help them to monetize those goals. It is the purpose we give our money that makes it valuable and guides our kids to make confident money decisions.”

Summer school lessons for finances

Here are five money lessons that parents can teach their children at home this summer, according to financial experts at Alliance Bank of Arizona:

How to build a balanced budget: Vacation planning is the perfect time to teach kids about budgeting. Questions like, “Where will we go?”, “What will we do?” and “How much will we spend?” can guide children through the decision-making and conscious-spending process. First, start allocating funds to basics like hotel, food and gasoline. Then, discuss that fun activities and souvenirs can only be purchased if you budget the right amount of money.

How to make important buying decisions (wants vs. needs): Review your household budget or a sample budget with your kids. Help them understand what a balanced budget is and that the goal is to save more money than you spend. Explain that there are items we need like shelter and food. But, there are also things that we want, like new shoes, a cell phone and toys, which can wait until we have saved enough to purchase them.

The importance of interest: Say you’re in a store and your child points to a toy and says, “Can you buy that for me?” Instead of handing over the toy, offer to loan your child a small amount of money, provided that they pay you back the same amount within 30 days. Remind them often that if they can’t pay on time, you’ll add more money to what they owe until they pay the money back. One day past the deadline, add to the amount and explain why they owe more.

The correlation between learning and earning: Set up a sample budget based on what your kids want. Then, determine the average monthly income of a high school graduate, someone with post-secondary training, someone with a Bachelor’s degree, and someone with a Master’s degree. This shows how much money they need to earn to have the things they want and how that correlates with their level of education.

The importance of being a contributing member of their community: Chores that are tied to earning money are a great way to help kids learn about their role in a family unit and gives them a glimpse at what is required of community members. An effective tool is myjobchart.com which helps parents set up and track chores for their children, along with prompting discussions about saving, giving and spending.

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Arizona Central Credit Union Launches Kids’ Website

ACCU smallArizona Central Credit Union is launching a new initiative to encourage financial literacy among children. Designed for children between the ages of 8 and 12, this program is intended to encourage sound financial habits and further an awareness of positive saving and spending practices.

Molly and Moe are the official mascots of the Monkey Money program, which incorporates an interactive website, children’s savings account and club member benefits. Games, stories, contests, jokes, definitions of financial terms, and information about the special Monkey Money savings program, can all be found on the website. Each month a new article and correlating activity will address a different financial theme. A coloring contest, which began at the launch of the website on June 21, 2014, will be held until July 31, 2014. Children don’t have to be Monkey Money members to enter, but can win cash prizes, and fun monkey items. Coloring sheets and the official rules for the contest can be found on the website.

“Arizona Central Credit Union is passionate about helping the children in our communities reach a higher level of financial literacy. By investing in creative and fun educational methods, we hope to encourage positive lifestyle patterns that will then translate into adulthood,” said Todd Pearson, President and CEO of Arizona Central Credit Union­.

Following the launch of the website on June 21st, Arizona Central Credit Union branches will be hosting a week-long youth event. Free gift basket raffle tickets and refreshments will be available at all branches. Arizona Central Credit Union will contribute a $10 deposit into Monkey Money accounts opened during this celebration week.

Founded in 1939, Arizona Central Credit Union has been serving members for over 75 years at 10 full-service branches, with offices in Phoenix, Tucson, Glendale, Chandler, Tempe, Flagstaff and Show Low. Visit www.azcentralcu.org or their Facebook Page, www.facebook.com/azcentralcu for more information.

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National Bank of Arizona Partners with YWCA

YWCA Maricopa County announced its new partnership with National Bank of Arizona (NB|AZ), to expand the YW’s Own It Financial Education Program, providing financial literacy to primarily low-income women and families at no-charge.

The YW is proud to be the foremost agency in Maricopa County providing financial education to people from all walks of life, many of whom are among the working poor, struggling to pay their bills and feed their families, even while working 40 hours or more a week. For 101 years in Arizona, the YW has provided women’s education, mentoring, and leadership to fulfill a common vision; equal opportunity for all people.  The YW believes a woman that is financially educated provides a better quality of life for herself and her family.

NB|AZ has always been a great supporter of the YW and its programs. Several of their employees volunteer to teach Own It classes, they sponsor major events like the YW’s Tribute to Leadership gala, and one of their employees, Mary Holman, has served on the YW Board for several years. This year, the NB|AZ Women’s Financial Group, a forum of professional women who join together to collaborate, network, and succeed in finance, business and life, will be joining forces with the YW to support its Athena PowerLink program. Athena PowerLink is a mentoring service that matches established professionals with upcoming women and minority business owners, in the hopes of helping them succeed.  By forming a partnership with YWCA Maricopa County, NB|AZ sends a shared message to our Arizona community; we care and are committed to its most vulnerable residents. With the support of NB|AZ, the YW will be able to expand its financial education program to reach more underserved individuals, and provide them with the tools they need to become financially stable.

“We could not be more pleased to award a $25,000 grant to the YWCA of Maricopa County in support of its ‘Own It’ Financial Education Program. Financial literacy for women is a mission that is shared and deeply valued by NB|AZ,” said Deborah Bateman, Executive Vice President, Director of Wealth Strategies at National Bank of Arizona. “The grant will enable the program’s expansion into smaller communities throughout Arizona, changing the lives of countless women through financial empowerment, education and awareness.”

If you are interested in learning more about Own It, you can visit www.ywcaaz.org, call the YW office at 602-258-0990, or email Financial Education Coordinator Bev Strom, at bev.strom@ywcaaz.org.

 

money management

National Bank of Arizona sponsors ThriveTime Challenge

National Bank of Arizona (NB|AZ) announced its sponsorship of the second annual ThriveTime Challenge, a statewide financial literacy initiative that aims to educate high school students about money management.

ThriveTime Challenge, founded by the 2013 NB|AZ Woman of the Year Sharon Lechter, is a tournament involving playing the award-winning ThriveTime for Teens board game. The board game was named the 2010 Creative Child Magazine Game of the Year and takes players on a financial rollercoaster where they must make crucial life decisions like buying cars and paying for college.

“We were honored to sponsor the ThriveTime Challenge for the second year in a row,” said Deborah Bateman, executive vice president and director of wealth strategies at NB|AZ. “Financial literacy is an important initiative to NB|AZ and we are pleased to support a program that encourages responsible money management beginning at a young age.”

Each participating school hosted its own single-round tournament and winners from each school progressed to a state-level competition on April 20 at Arizona State University West campus in Glendale.

The top three finalists of the state competition received scholarship dollars ranging from $2,500 to $5,000, and the home schools of each finalist received $1,000. Participation in the tournament was free for all participating schools and students.

For more information about the ThriveTime Challenge, contact Angela Totman at angela@pyff.net or visit www.thrivetimechallenge.com. For more information about National Bank of Arizona, visit www.nbarizona.com.

Financial Literacy Needs to be Taught Outside the Classroom

Financial Literacy Needs To Be Taught Outside The Classroom

As the spring school semester begins, one of the most valuable lessons that kids, especially teens, can learn isn’t being taught in a classroom setting: financial literacy.

Or, how not to graduate into financial problems.

But, aside from the birds and the bees talk, the money talk is probably the most uncomfortable for parents. To help ease this anxiety-ridden discussion, below are some key areas that should be discussed as we enter this new school year.

Where does money come from?

Turns out, money neither grows on trees nor out of parents’ wallets. And, not all money is meant to be for “fun,” such as at the movies, with a new girlfriend or on new iPod songs.

But how do you get a kid to understand this?

Why not focus on a “money in, money out” budget with them?

Often, children focus only on money going out. But where does it go? And when? And why? A budget, reviewed with and by a parent each month, can be an easy way to show the value of money on a regular basis.

For example, if a child gets a $40 allowance each month, have them develop a budget to make that money last for an entire month. This means saying “no” to spending all the “fun” money at once. It also helps children understand how to prioritize.

The lesson: Sometimes a lifestyle adjustment is required in order to ensure one does not exceed money going out versus money coming in.

Credit cards are supposed to be paid back?

Believe it or not, we actually recommend working with children on building credit at a young age, but only if they can do so without maxing out on their available balance, straining to make payments or, worse, defaulting.

This is an especially important lesson to be instilling before college. Why?

Credit card companies generally offer low limits to young adults entering college. This typically allows for more freshmen to apply and get approved as soon as possible. Some offer incentives to apply. Many companies simply place applications on college desks and in dorms — and freshmen apply by the thousands, not realizing that every penny spent on that credit card is owed back, with interest.

By working with children on credit starting from a young age, parents can help them grow to understand the impact of good or bad credit on one’s life. In addition, just as bad spending is habit-forming, so are good spending and saving.

Don’t do it alone!

Sure, parents are the first — and best — figures to talk about money with children and teens. However, you are not alone! There are resources to help reinforce your messages and lessons. For example, Junior Achievement is available to  most high school students in Arizona – Junior Achievement.

“Junior Achievement of Arizona has been educating K-12 students about entrepreneurship, work readiness and financial literacy since 1957,” says Joyce Richards, president of Junior Achievement of Arizona. “This year alone, we will engage more than 72,000 Arizona students in our programs.”

The organization, known as JA to most Arizona educators and business leaders, offers supplemental programs to elementary, middle and high schools statewide as well as after-school programs and on-site education opportunities.

The JA Finance Park enables students to build foundations for making intelligent, life-long personal finance decisions. The program, focused on middle school-age kids, consists of 19 teacher-led lessons at school, and is coupled by a half-day on-site simulation in the Finance Park, which is located in Tempe and done as a field trip in most cases. This on-site simulation takes kids on a journey to create a personal budget including rent/mortgage, car payments, insurance, savings, entertainment, groceries and more. They are even given simulated careers and salaries.

“As students strive to create a balanced budget, they begin to understand the value of money, and make the connection between hard work, education, and their future earnings,” Richards says.

For more information about Junior Achievement of Arizona and any of its programs on financial literacy, please visit jaaz.org.