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Helping Clients Teach Their Children

Did you see the recent Investment News article Financial literacy: An epic fail in America? Although 78% of financial advisors strongly agree that financial literacy is a serious problem in the U.S., only 4 in 10 advisors are doing anything to address the problem.

Yet, according to the 2018 Survey of the States: Economic and Personal Finance Education in Our Nation’s Schools, only 17 states require that high school students take a personal finance course.

As a financial planner or advisor, what can you do to help your clients and their families in this important area? If you aren’t engaged in conversations with your clients about how to help their children learn how to make good decisions about money, before, during and after college, why not?

A good place to begin is by developing a list of topics that they can use to make sure their children’s financial bases are covered – preferably before they go away to college. Here are some topics to get you started. I’m sure you can think of a lot more.

Basic banking and budgeting

  • How to minimize bank fees and charges
  • How to use online and mobile banking services to monitor their accounts
  • How direct deposit works and why it’s a good idea
  • How to write a check, how debit cards work, how to use billpay services
  • How to access cash – using ATMs, getting cash back when using a debit card. Count your cash!
  • How to use Venmo, PayPal or other direct payment programs
  • How to create a basic budget and stick with it
  • Making smart spending decisions

Using credit wisely

  • How to manage credit cards, avoiding fees and high interest rates, managing payments
  • Understanding student loans and their true cost
  • Know what you owe and to whom
  • How much debt can you afford?
  • What do credit scores mean? The importance of paying bills on time
  • Preventing identity theft

Understanding contractual obligations

  • Loans, leases and rental agreements
  • The risks of being a cosigner

How to buy a car

  • The true cost of owning a car
  • How auto insurance works

How to file a tax return

Employee benefits and how they work

  • Health insurance
  • 401(k) or other retirement plans

For additional ideas, here are two books that we recommend:

After putting together your list, consider creating your own checklist or guide – with your branding – called “What You Need to Know About Finances Before College.” By helping your clients teach their children, you are helping your next generation of clients get started down the path toward a lifetime of financial responsibility.

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