How to level up your kid's and teen's financial literacy in 2024

Financial literacy is the ability to understand and properly manage personal finances. It is having the necessary knowledge and skills to make smart financial decisions. Luckily, it’s never too late — or too early — to be financially literate. In fact, if you have a child or teen, this is the perfect time to encourage them to embark on the journey. They’ll pick up skills that will help them make the right economic decisions all through adulthood.

The importance of financial literacy for the entire family

Financial literacy is important because it helps you understand basic concepts that relate to money and economics. These include earning, budgeting, spending, saving, and investing. Financial literacy equips you with critical thinking and problem-solving skills that can help you make informed decisions about you and your kids' personal finances. 

Simply put, financial literacy is key to reaching your financial goals and building a secure future for you and your loved ones. 

A financially literate kid or teen can create budgets, use money wisely, manage debts, and take full control of their financial health. Whether it’s everyday spending or a long-term investment, they’ll always be well-positioned to use money as a resource for advancing their lives and those of the people around them. 

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If you’re a parent, you’ll gain a lot from leveling up your kids’ financial literacy in 2024 and beyond. A good understanding of money and how it works can set your child on a path to smart spending and investing. This financial literacy 101 blog provides the basic knowledge your child needs to know as they grow through high school, college, and adulthood.

Leverage expert advice and resources

Financial literacy means being informed about money and financial matters. It means understanding how things like credit cards and debt can affect your credit score. Even if your kid or teen doesn’t have a card or account right now, financial literacy can help them make the right decisions in the future.

Such money management skills come from expert advice and resources that you can find online and in libraries. Professionals like financial advisors and even economics professors can help students and young adults understand what it means to manage an account, check banking fees, obtain credit reports, file tax returns, and minimize debt.

There are also online resources that kids and teens can use to level up their financial literacy. Enter the Greenlight app, which has tons of helpful material on earning, budgeting, saving, and investing as a young person. Other resources, like the Next Gen Personal Finance (NGPF) organization, provide financial learning materials such as case studies and practical activities for young learners.

Leverage technology for financial empowerment

In today’s world of financial technology (fintech), it’s impossible to ignore the influence of technology on financial literacy. There are many apps that teach kids and teens how to earn, spend, save, and invest. 

Greenlight’s app promotes good personal finance habits for kids and teens. It offers a budgeting tool to help kids and teens learn about spending controls within a safe environment. There’s also a parent dashboard that allows parents and guardians to set spending limits and reinforce the need for effective budgeting. 

Learning through gaming: the Level Up approach

Kids and teens can use games to learn financial literacy, money management, and decision-making skills. 

Greenlight’s Level Up™ financial literacy game is designed for kids and teens. Level Up packs a wide range of helpful resources, including a comprehensive curriculum, educational challenges in finance, and rewards. The game imparts a variety of skills, including earning, budgeting, saving, and investing — skills that kids and teens need to be financially literate.

Allowance and responsible spending

Financial literacy includes understanding where your money comes from and where it goes. This is the cycle of earning and spending. 

For many kids and teens, it's likely most of their income comes from allowances. For some, particularly those in college, it may also come from side hustles that they do while on holiday. 

Whatever the case, responsible spending means living within your means to avoid falling into debt. This is basically budgeting and sticking to their budget. If it seems challenging to your child or teen, consider introducing them to an app like Greenlight that helps kids and teens track their monthly expenses and cut down on things they can do without.

Many college students will graduate with student loans and credit card debt. People who frequently overspend may find themselves with other unnecessary debts in addition to the two mentioned. 

Financial growth through round-ups and savings

Another important aspect of financial literacy is learning how to save for the future. Savings provide investment and emergency funds, both of which are important in securing your child’s financial future. While investing allows you to potentially grow your money, an emergency fund ensures that you don’t drain your accounts in case of a costly yet unexpected event.

Saving is usually simple in theory but hard to implement, more so if you don’t have a strategy. One good rule of thumb is to use the 50/30/20 rule where you spend 50% of your income on needs, 30% on wants, and 20% on savings. 

Additionally, you can leverage round-up apps so that you have automatic savings from your debit card. Round-ups generally round up your debit card purchases to the nearest dollar and transfer the difference into your savings account. Greenlight Round Ups offers this feature directly.

Financial literacy made fun

Financial literacy for teens and kids is all about learning how to earn, budget, and save. And guess what? Greenlight makes it super easy to learn all of that (and more) in a single app.

With the Greenlight app, your kids can become money management pros. It covers a wide range of financial topics, from making smart economic decisions to reading credit reports and everything in between.

Ready to learn about the world of money? Sign up for Greenlight today!