Like all transition activities, financial literacy is something that should be started early. Although all students need to plan ahead for the future, it’s important to have a detailed, clearly laid-out plan when setting a student with unique learning needs up for the future.
In the next few weeks, we will tell you everything you need to know to help your student become financially literate – and financially independent. These articles will have all the resources you need to guide the teenager in your life toward financial maturity.
Although the best time to start planning is early high school, you can start having conversations about finances at any time. It’s never too late to make a plan!
Without further ado, here are some of the major topics you need to cover when planning for financial independence with a teenager who has unique learning needs.
What Exactly is Financial Literacy and Why is Teaching it Important for Unique Learners?
When a student knows the ins and outs of his finances, it will help him live more independently in the future. After all, you can’t be independent if you aren’t financially responsible. Multiple studies have shown that students who have more financial responsibility have better outcomes when it comes to self-sufficiency, employment, and more.
So what is financial literacy? It’s exactly what it sounds like – it’s understanding the basics of money, income, saving, and spending. Every student will vary in their financial goals and which outcomes make the most sense for them – you don’t necessarily need your 15-year-old to understand all the nitty-gritty details of a 401k, for example.
However, it’s important that you start small and work up from there. Teaching financial literacy to learners with unique needs should be a team effort, with everybody from the parents, teachers, counselors, administrators, and other support members involved in helping a student to become financially literate.
Most importantly, the process of becoming financially literate needs to directly involve the student himself. Students should become active participants in building their financial futures – and it should be started as early as possible in the school-age years.
Core Topics to Teach When Planning for Financial Independence
Saving, Budgeting, and Investment
This is the first step in preparing any child for adulthood. The word “investment” can sound daunting even to parents, but really, it doesn’t have to be that complicated.
Teaching about budgeting and saving should start as early as possible. This can be done with something as simple as a piggy bank and by showing your children that things at the store cost money. When a child gets older, you can teach more about saving and budgeting by offering allowances or teaching the responsibility associated with managing a budget.
Online Resources to Help With Budgeting
There are plenty of resources online just waiting for you to tap into them – especially when it comes to budgeting. These tools are invaluable when it comes to working with students with diverse learning needs. Not only can they help your student stay organized, but they can help you keep track of their progress when they’re first getting started, too.
Paying for College
Not all students are college-bound, but for those that are, this is an important step in the financial literacy timeline. Students need to be taught the cost of college and how to compare costs at various universities.
They need to be given some education in “risk vs benefit” (does it make financial sense to take out student loans, given the potential salary of this job?) and about the various resources available to college-bound students, like grants and scholarships.
It’s also important for college-bound students with unique learning needs to be educated about the various resources available to them in particular. There are all kinds of state and federal organizations that will work with unique learners to find and secure funding as they begin their college careers.
Taxes
Very few high school st students are educated when it comes to taxes – and this is a crying shame. All students should be taught the basics about how to pay and file taxes, even at the simplest level (or by using software such as TurboTax). Tax planning should be an integral part of any student’s financial literacy development.
Fraud and Identity Theft
As the digital age barrels along, it’s of vital importance that all students, but especially those with unique learning needs, learn more about the risks of fraud and identity theft. This should be done in relation to the online world – How can you keep yourself safe when shopping online? What about online banking services? Why should you keep your social security number and other identification information secure? – but also in real life.
Students need to be taught things such as ATM safety and other vital principles in order to become truly (and successfully) financially independent.
Smart Shopping
Smart shopping is something that many teenagers – as well as countless adults! – struggle with. It goes hand in hand with many of the topics mentioned above, but it deserves its own chunk of time when you are working with a student with diverse learning needs, too.
Teach students about how to plan their meals for smart grocery shopping and the value of shopping with cash. Work toward setting a budget for different kinds of shopping and spend some time on payment methods, too.
Setting Smart Career and Earning Goals
One of the hardest lessons for all students to learn is how to set smart learning goals. Unfortunately, this is a financial literacy topic that very few adults have even mastered! Nevertheless, it’s an essential part of financial planning for anybody at any stage of his or her life.
Teach your child how to set a smart career and earn goals. What is a realistic salary for the job you want to pursue? How can you make more money (for example, by pursuing more education, professional development, or getting more experience)? What is the “cap” for that salary, and what can you realistically expect to earn when you are first starting out?
Every aspect of banking should be covered with your transition-age student, including:
- Setting up, monitoring, and maintaining checking and savings accounts
- Interest rates in savings accounts
- Writing checks and balancing a checkbook
- Managing direct deposit and direct pay
…and more!
Making Money and Living on Your Own
This financial literacy topic ties together everything you’ve already taught your transition-age child. However, it’s important to teach your child strategies for managing money, income, and expenses while living on their own. How do you pay bills? How do you stay organized? Provide your learner with as many resources as possible to prevent overwhelm and frustration later on.
Setting Reasonable Goals for Financial Literacy
As you’re planning for the ultimate goal of financial literacy, it can be helpful to set multiple small, mini-goals along the way.
This should be done in the context of SMART goals. As your child progresses, make sure he or she is setting goals that are:
S – Specific
M – Measurable
A – Attainable
R – Relevant
T – Time-based
The Value of Money
Educate your child on the importance of money and its value – as a tool and as something that is limited and a finite resource. Don’t forget to cover things like charitable giving, ways to make more money, and other topics to help your child understand the value of money.
Investments and Long Term Purchases
Another key element of financial literacy – albeit one that is slightly more advanced – is that of investments and long term purchases. Teach your student how to plan for retirement and long-term purchases, like buying a house or car.
Credit and Debt
After you’ve mastered the concept of long term purchases, it’s time to move on to credit and debt. Not all debt is bad – and it’s important that you cover all facets of this topic, including lending, credit cards, and credit scores.
Supports for Financial Literacy
Finally, before your child sets off into “the real world,” make sure she has the resources necessary to be successful on her own. What state, local, and federal resources are available from the government? What about online resources? What have you provided your child that will help her on her way to becoming financially independent? Consider looking into rouses like ABLE accounts or trust accounts if you are able to as well.
Start Small and Improve to Help Your Student Become Financially Literate
You don’t need to move mountains in a day. To start preparing your child for life after his teenage years, start small and keep building.
It is important that you consider the level of financial education the student has received to date. Chances are, they’ve received very little high-quality training in personal finance. As very few schools in the United States require personal finance coursework for students to graduate, most students have no idea what it takes to become financially independent. And more than 56% of all American parents say that their older children (even those as old as 24 years old!) have no involvement in family finances.
Make sure your son, daughter, or student has the key financial systems in place to be successful before they cross that stage at graduation – ideally, long before. Organizing a clear financial plan with the student as the key stakeholder and decision-maker is the best way to set a student with unique learning needs on a path to success and independence.
Further Reading
- Ascent Private Capital Management: Helping your child become financially self-sufficient
- PBS: What is Financial Literacy?
- Amanda Barroso: Majority of Americans Say Parents Are Doing Too Much for Their Young Adult Children
For a smart career, for better life leading, for a better investment, for better save money, financial education is really important.
Thanks for sharing the informative article.