A recent study showed 50 percent of teenagers were interested in learning more about CD rates, opening a certificate of deposit or savings account and managing money. Many more, 76 percent, said they wanted to learn about financing large purchases such as a home what mortgage rates today are and 70 percent said they wanted information about investing like how to use a CD calculator.
Whatever the reason for this lack of knowledge, the results are plain to see why too little savings, too much spending, and poor choices when it comes to loans and credit cards. Savings accounts, savings account rates and financial education and helping consumers get larger tax refunds through volunteer work at tax assistance sites.
Linking credit and other products to savings through, for example, credit cards with an automatic savings component which is the challenge faced by banks—aswell as by government agencies and community organizations partnering with financial institutions.
To expand efforts in each of those areas through innovative and creative new programs and have one company that has made a substantial commitment to financial education.Consider the issue of automated savings plans,which help consumers put money aside by essentially taking the decision to save out of their hands.
Fortunately many are making such an effort, and in addition to the federal programs mentioned earlier, a growing number of programs are also offered by the private and non-profit sectors specifically aimed at helping young people to become better stewards of their money. Many more young people do not know how to shop for the best auto insurance rates especially since people under 25 pay the most on auto insurance premiums.
Considering all of the things people learn in their formative years, it is perhaps surprising that so many grow up understanding so little about money.They would have traditional banking products, but their main offering would be non-traditional services that include fee-based check-cashing, basic savings accounts with access to low-cost money orders, deposit secured loans for those with bad credit histories, and budget-management and credit-repair seminars.
The non-profit National Endowment for Financial Education provides lessons onmoneymanagement directly to students through two programs. Another study revealed that approximately 88 percent of surveyed teens want to learn how tomake theirmoney grow.
Two-thirds believe learning about money is “interesting,” and 88 percent indicate they are motivated to learn about money matters to pay their bills and stay out of debt.Reaching the unbanked will require proactive efforts not just by banks.
Non-profit groups and government—and a deep commitment by all to educating consumers aboutmoneymanagement.Many young people have a strong appetite for financial knowledge.
Employers can play a big role in financial literacy.Employers are often in the best position to make sure their employees have the skills needed to make these decisions.The need for smart decisions has become ever more apparent with the rapid shift away from employer-directed defined benefit plans and toward retirement plans directed by the employees themselves.