According to a phone survey conducted by the American Institute of CPAs, 61 percent of parents pay their children an allowance, averaging $65 per month. However, only 1 percent of parents said their children save any of their allowance. Teaching children financial responsibility early can have a huge impact on their financial habits as they become adults.
Along with another local CPA, I spent several hours this summer volunteering with girls aged 13-15 discussing topics such as balancing a checkbook, budgeting and saving, and credit cards. We even talked about payroll deductions and examined a W-4 and W-2. These are topics that are rarely mentioned in school.
Several of the girls had opened their own checking accounts, and they had overheard their parents talk about credit cards. However, many of them were shocked to learn what is deducted from a paycheck. And, they had never really thought about budgeting.
While I cannot say I kept them fully engaged each hour, many of the girls asked relevant questions. Because the math skills varied among the girls, we kept examples simple. We used a financial calculator in Excel to show the impact of paying more than the minimum payment on a credit card, which was surprising to girls who were paying attention.
I hope to continue this volunteer project in the future. I truly believe the more children see good examples of financial responsibility, the more confident they will be to take control of their financial future. In the meantime, I’m open to any ideas to make W-2s and budgets more exciting to teenagers.
Jessica Miles, CPA