Tuesday, April 9, 2019

By, State Treasurer Kelly Schmidt

Do you remember the days when people wrote a check for everything, or prior to that cash was used for purchases? Today it seems I seldom have cash on me, and rarely do we use checks. We have come to a time when it is all about online shopping or using debit or credit cards, creating ample ways to overspend. Using debit and credit cards can lead us to believe we always have “cash at our fingertips” which can easily lead us into financial trouble. Our children are growing up in a society where you can buy anything as long as you have “plastic,” and they do not understand what that truly means. I still recall, when our sons were young, saying to me, "Just go to the machine, Mom". The machine had money, but Mom didn't.

April is Financial Literacy Month; an entire month created to help educate adults, teachers, and students on financial responsibility. Many consumers do not fully understand the checks and balances of money. This has been identified as one of the main challenges faced by Americans.

It is important to help our youth understand financial literacy; how to pay bills, the use of credit, saving for retirement and how to invest. According to the FINRA (Financial Industry Regulatory Authority) Foundation, nearly two-thirds of Americans could not pass a basic financial literacy test. In the US there are only five states that require a personal finance course for high school graduation: Alabama, Missouri, Tennessee, Utah, and Virginia. Here in North Dakota, a class may be offered but it is not a requirement for graduation. It's up to parents to teach our youth financial literacy.

What can we do to help? The most important thing we as parents can do is talk to our kids about money and start that conversation when they are young. They need to know the difference between a need and a want, or what it means to save money and how to earn money. Children need to understand delayed gratification. Create self-discipline to save for a car, college, living expenses, insurance, etc. How does credit work? Our youth must understand “plastic” comes with a cost. Practice this concept with your family. If they ask for money, charge them a little interest each day until they pay you back. The more we can instill these good practices in our youth the better for them, our families and our communities.