Texas Border Business
By: Lee Reed, IBC
While toddlers don’t know the difference between a $1 bill and a $100 bill, studies have found they certainly understand the concept of exchanging money for goods. Trading a piece of paper, regardless of denomination, for candy, is an excellent idea to a three-year-old.
A 2013 financial literacy survey conducted by the National Foundation for Credit Counseling and the Network Branded Prepaid Card Association found that both children and adults benefit from lessons on financial management. Forty percent of the participants in the survey gave themselves a financial knowledge grade of C, D, or F. And a 2012 study by Kiplinger’s Personal Finance magazine found that only two-thirds of parents talk to their children about money at least once a month.
In fact, America’s lack of financial education garnered so much attention, the U.S. Senate designated April as “National Financial Literacy Month” in 2004. Since then, financial institutions throughout the country have focused on delivering a variety of financial education initiatives during April. The lessons are well-worth learning, according to the 2013 Financial Literacy Survey conducted by the National Foundation for Credit Counseling and the Network Branded Prepaid Card Association. The survey found that 77 percent of consumers have financial worries, with insufficient savings at the top of the list. Aside from not saving enough, 26 percent of U.S. adults are worried about servicing their debt commitments.
Another important date this month is “Teach Children to Save Day” on April 11. Since its inception in 1997, more than 130,000 members of the American Bankers Association, including IBC Bank employees, have taught savings skills to six million students.
Introduced in 2007, the Money Buzz program has been delivered by IBC employees to more than 22,000 children throughout Texas and Oklahoma. The teaching tools, designed in conjunction with educators, earned the Texas Bankers Association’s Leaders in Financial Education Award in 2010 and the Texas Education Agency’s Employers for Excellence in Education award in 2011. This spring, IBC employees will be visiting schools to personally deliver the lessons to children grades K-8.
Financial literacy studies have found people, both children and adults, learn such concepts best when lessons are personalized, practical and can be applied to real-life situations. And the sooner, the better. Once a child becomes aware of the concept of money, the next lesson is to understand its cumulative value, the idea that it’s possible to buy more with $2 than it is with $1. With that “saving seed” planted, children are better able to understand the idea of saving for a big purchase such as a new video game, rather than the instant gratification of a candy bar that’s soon only a memory.
However, even with all the financial education resources available, most of those surveyed cite family as their primary source of economic and financial guidance. We owe it to our children to give them the financial grounding they’ll need to make prudent decisions as adults. The lessons we instill in a young child, will serve them for a lifetime.
The Money Buzz is a reliable source parents can use for their children. Visit ibc.com to find the workbooks under the “Free Zone” for use at home.
Learning fundamental concepts such as paying yourself first, budgeting, and value vs. cost early in life can save children from financial headaches for years to come.
Author’s bio: Lee Reed is the Executive Vice President Head of Commercial Lending for IBC
