With the economy being stagnant the importance of solid financial decision-making and education is as apparent as ever. Click to hear KMZU’s Chelsea Wade talk with University of Missouri Extension Finance Professor Robert Weagley:
Press Release from University of Missouri Extension
COLUMBIA, Mo. –With the current economy remaining stagnant, the importance of solid financial decision-making and education is as apparent as ever. University of Missouri financial experts say creating good financial habits at an early age is vital to long-term financial success. Rob Weagley, chair of the personal financial planning department in the College of Human Environmental Sciences, and Joan Stafford, an MU personal financial planning graduate student, have compiled a list of the top ten financial tips aimed to help teenagers develop good financial habits.
“These tips are designed to help young people understand key financial principles, quantify financial success, and send them down the road to that end,” Weagley said. “Our hope is that they learn the importance of their goals, their education, their savings and investments, their budgeting, their insurance coverage, as well as other matters related to their overall physical and spiritual health to the overall well-being of society.”
The number one tip Stafford and Weagley offer teens is to invest in education. They say investments in education are investments in human capital and it is the best investment that can be made because it is the one type of capital that can be fully controlled.
The other Top Ten Teen Financial Tips include:
- Budget Your Money – Creating a budget is not only good preparation for emergencies, but it also instills a sense of discipline and empowerment.
- Establish Good Credit – Learn how and when to use credit. Pay your bills on time, for this is the biggest factor in your credit score.
- Establish an Emergency Fund –An emergency account of three to six months’ living expenses is a key to financial strength.
- Manage Your Risks – Purchase adequate insurance for your risks. Don’t forget personal liability and disability insurance coverages.
- Start Investing Early –Start as young as you can to allow the power of time to add to your investments.
- Make Smart Investments – Maintain a diversified portfolio of assets by placing your money in a range of investments and maintain targeted allocations.
- Budget for Taxes – Taxes must be paid on your earnings, your investment gains, your purchases, your home, your car, your boat, and, ultimately, your death. You must pay them.
- Think Outside the Box – Don’t follow the crowd. Chart your own course. Keep focused on your destination, even when others are jumping ship.
- Believe You Can – Dare to dream your dreams and seek your goals.
In an effort to educate teenagers further, Stafford, who is a financial counselor in the MU Office for Financial Success, visits high schools across Missouri giving personal finance seminars. Stafford is the director of the program, Top Ten Teen Financial Tips, which is sponsored by State Farm Insurance. She has been to more than 30 high schools in the current school year and hopes to visit 50 by the end of May.
“I see students who do not understand the basic principles of finance,” Stafford said. “Giving students this education while in high school should help them avoid bad debt, especially when they get into college and start dealing with loans and credit cards.
For more information on the Top Ten Teen Financial Tips, visit financialsuccess.missouri.edu