Guest Article: ?The Importance of Financial Eduction?How to Help ...

The second in a monthly series of articles to help sellers and their families take control of their finances.

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The Importance of Financial Education ? How to Help Your Kids Get Ahead
by Imran Khan

With the global economy in a meltdown, taking care of finances at home is more important than ever.

But where do children learn about money? From their parents? From their schools? Or do they in fact never receive a proper lesson about how to manage their finances and just pick it up as they go along?

Staying afloat financially involves balancing a variety of different factors. No longer just a case of working out how much money to spend, modern life demands that individuals have a good understanding of credit, loans and finance.

In fact, it is almost impossible to manage without being involved in some kind of finance or credit agreement. You may be vehemently opposed to getting into debt, but where do you plan on living? If you have any aspirations about owning a property of your own, a mortgage is almost certainly going to be necessary.

And even if you are determined to live without relying on credit cards or loans to pay for anything, if you want to get a cell phone, you will still need to be able to compare the relative costs and understand the contract costs.

For teenagers growing up and unused to dealing with financial facts and figures, the jargon involved can be a dizzying whirl of meaningless words which are hard to translate into real terms. For example, take APR, a phrase commonly used in finance contracts. Although many adults may be able to tell the difference between a good and a bad deal, it isn?t exactly easy to explain precisely how it works.

To give your children the best chance of escaping a spiral of debt, financial education is an essential. And even if their school offers classes on the subject, tackling it at home, too, can really help to put things in context.

When youngsters head off to college, managing a budget can be one of the most difficult things to get to grips with, as the chances are they will have never had to do it before. Therefore, working out how to get the best deals on food or how to apportion their cash to pay for food, travel and bills, can be difficult.

You can give your children a head start by involving them in your household budgeting at home. Showing them all of the things which need to be paid for ? and how much they cost ? can be a good way of starting to build up an understanding of money and expenditure. And if you are feeling brave, you could even let your kids control the grocery shopping for a week! Give them a fixed budget and an objective and let them give it a go. Nothing beats hands-on experience!

But of course, managing day to day spending is only half the story; children also need to be able to understand how to read finance agreements and how to work out what represents a good deal.

Whilst you can certainly help out in this area ? perhaps by going shopping for a cell phone together and comparing the contracts ? enrolling your child in financial education classes will give them a helping hand. If the school does not offer financial education, you could always ask whether it is possible to arrange some classes to cover this topic or, if not, whether an after-school club could be offered. Providing your child with access to a professional who understands finance inside-out and can answer any tricky questions that come up, will be of huge benefit.

Unfortunately, financial education for children has not moved as quickly as the world around it and many youngsters now leave school poorly equipped to deal with the deluge of paperwork and contracts they will be offered. Unscrupulous firms know young adults may not be as astute in shopping around for the best deal and could prey on their vulnerabilities.

Your child may not be enthused at first with the idea of financial education, but if you couple this with a reward, such as the chance to make a purchase based on their new knowledge, you might find they absorb enough information to give them a good chance of avoiding debt in the future.

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This article was written by Imran Khan at Baines and Ernst ? a specialist debt management company..

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Source: http://salesandmanagementblog.com/2012/11/01/guest-article-the-importance-of-financial-eduction-how-to-help-your-kids-get-ahead-by-imran-khan/

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