Wilson College Online Blog

From earning wages to investing for the future, managing finances is an inevitable part of life. For many, regardless of age, this responsibility can prove challenging. Introducing financial literacy to teens is an excellent way to maximize their understanding early on and improve their financial well-being.

A Master of Education (MEd) degree empowers students to become educators who introduce teens to financial literacy, setting them up for success beyond the classroom.

What Is Financial Literacy?

The term “financial literacy” refers to an individual’s ability to comprehend various essential financial concepts. Strong financial literacy builds better decision-making skills involving money, leading to a more successful financial future. Different areas of financial literacy that help an individual understand their finances more holistically include the following:

• Income

• Budgeting

• Saving

• Investing

• Borrowing

Becoming familiar with how each of these aspects influences financial standing can help a person navigate their finances more effectively.

Why Should Teens Understand Financial Literacy?

Financial literacy for teens is important because the earlier that individuals are introduced to the complexities of financial management, the better their chances of making sound decisions regarding their personal finances. Below are some reasons that teens should develop financial literacy.

Helps Avoid Financial Frauds

Consumers lost more money to investment scams than any other type of fraud or scam in 2023, according to the Federal Trade Commission (FTC). One reason that fostering financial literacy in teens is so important is that it reduces the risk of falling victim to financial fraud. With the landscape of finances always changing, teens must know how to identify and avoid scams.

Supports a Strong Financial Foundation

Establishing good financial habits at an early age can foster a positive relationship with money throughout one’s life. When teens learn more about their income, spending habits, and how they can set clear monetary goals, they can establish a firm foundation of knowledge to build upon as their financial endeavors grow and change. Its ability to create strong financial grounds is just one of the many reasons that financial literacy for teens is so important.

Builds Confidence in Finances and Beyond

Developing a strong understanding of finances can result in a sense of confidence. Enhancing financial literacy for teens is just one way that parents, guardians, and educators improve teens’ autonomy and set them up to be successful, independent adults.

Financial Literacy Tips for Teens

How can teens best take care of their finances? Explore different financial literacy tips for teens below.

Set a Budget

A solid introductory practice for strengthening financial literacy for teens is setting a budget. Creating a budget—whether weekly, biweekly, or monthly—helps teens track where and how they spend their money and determine whether they’re overspending, or laying the groundwork for setting financial goals.

Increase Scam Awareness

To avoid financial deception, teens must first understand the various types of scams. Common financial scams that a teen may encounter include the following:

• Charity Scams: Malicious users pose as either legitimate or fictional charities to target well-meaning individuals for fraudulent donations.

• Tips to Avoid Charity Scams: Should a teen wish to make a charitable donation, they should go directly to the charity’s website. Many established charities use secure payment systems to protect donors’ financial information.

• Mobile Payment Fraud: Thieves are exploiting the popularity of mobile payment apps to commit financial fraud.

• Tips to Avoid Mobile Payment Fraud: Teens can avoid falling prey to mobile payment fraud by only sending money to trusted contacts, such as family and friends, as well as double-checking the recipient’s information before sending a payment.

• Impostor Scams: Scammers pose as a trusted source, such as an employer or a bank, and prompt victims for financial information.

• Tips to Avoid Impostor Scams: If contacted by what appears to be an employer or a financial institution regarding financial matters, teens should reach out to the source directly to confirm the request.

By being mindful of their teens’ or students’ spending habits, as well as the types of learning styles they’re most responsive to, parents and educators can help increase youngsters’ awareness of these scams. One way to do so is to showcase real-world examples of how and where teens may come across these types of scams, as well as informing them of best practices for avoiding them.

Set Short- and Long-Term Financial Goals

Outlining clear and attainable financial goals is great practice for developing financial literacy. With the information they gain in reviewing their income and spending habits, teens can create short- and long-term monetary goals for themselves. Setting and working toward financial goals is another way that financial literacy for teens improves self-accountability and confidence.

Help Facilitate Understanding With Wilson College Online’s Master of Education

By helping improve students’ understanding on a broad range of subjects, teachers can have a profound impact on their students’ lives. With an online MEd from Wilson College Online, you can become an influential educator who provides students with lifelong knowledge.

Wilson College Online follows a self-paced model that allows educators to achieve their professional development goals on a timeline that best suits their needs. Take control of your career with an advanced degree from a program rooted in transformative and ethical education.

Recommended Readings

How to Become a High School Teacher

Benefits of Experiential Learning

How to Create an Inclusive Classroom

Sources:

Consumer Financial Protection Bureau, What Are Some Common Types of Scams?

Federal Student Aid, Budgeting

Federal Trade Commission, As Nationwide Fraud Losses Top $10 Billion in 2023, FTC Steps Up Efforts to Protect the Public

Investopedia, “Financial Literacy: What It Is, and Why It Is So Important to Teach Teens”

Investopedia, “7 Everyday Activities That Teach Kids About Money”