At Potomac 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 Survey of the States, only 30 states in the U.S. require high school students to take a course in personal finance and only 25 states require students to take an economics course. While this denotes a marked improvement since CEE’s first survey in 1998, there remains a sizeable financial education knowledge gap.
Potomac 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.
Potomac 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). Potomac Bank offers automatic transfer services to move a set amount from your checking account to savings monthly.
- 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. Knowing how stocks, bonds and mutual funds can affect an investment portfolio shows you how financial decisions can grow—or shrink—your savings. 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. Use Potomac Bank’s “Credit Score” feature within your Online and Mobile Banking where you’ll find not only your credit score but tips to help you establish and maintain good credit.
Potomac Bank also offers the free Censtables Financial Education program. Educational information is categorized by age groups: Children, Teenagers, Millennials, Adults, and Mature Adults. There are excellent tutorials and practice modules.
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.