Back-to-School Lessons About Money
August 17, 2022
As your children or grandchildren prepare to head back to school, whether they’ll be hopping on a yellow school bus or flying off to college, there are financial lessons to share with them. Even young adults getting ready to launch toward independence may benefit from insights you can provide about money.
Washington Trust Wealth Management is ready to assist with financial lessons that include:
Saving. Teaching kids about budgeting for needs versus wants, saving for the future, and giving to those less fortunate are valuable lessons that you may need to share over and over again. The 50/30/20 Rule1 suggests divvying up after-tax income (or allowance, as the case may be) into:
- 50% needs
- 30% wants
- 20% long-term savings
Visit our website for a 50/30/20 calculator (or show them how to do the calculation themselves). In addition, you may share reasons for allocating some of their “wants” towards charitable causes.
Financing an automobile purchase. If your child or grandchild is ready to buy his or her first vehicle, they may need information about what a car loan costs and how borrowing works. They should understand what an APR (Annual Percentage Rate) is and how it affects the ultimate cost of the car, the impact the term of the loan and amount borrowed will have, and how to identify hidden costs.
Repaying student loans. Many high school seniors have begun filling out their college applications and are deciding where they’d like to be next fall. For many, cost is a factor to consider, as the most expensive colleges in the country now run around $80,000 per year (topping the list: Harvey Mudd College in California, the University of Pennsylvania, Amherst College, and USC, with many others not far behind).* If your senior already has or anticipates taking out student loans, we have helpful information about paying them back, including what to do if you need to defer and strategies for repayment.
For details about these lessons as well as additional digital resources, explore our Financial Wellness Center for information that can help you teach kids about finances! In addition, your Washington Trust Wealth Advisor is available to speak with you and the next generation to provide guidance. Contact us to learn more!
*The 50 most expensive colleges in America, ranked, Learish, Jessica, CBS News, August 3, 2022.
1. Consumer Financial Protection Bureau (ConsumerFinance.gov)
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