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Janice France-Pettit:Financial literacy a lifelong endeavor

Union Bank

Posted: March 12, 2011 1:55 a.m.
Updated: March 12, 2011 1:55 a.m.
 

Today, many consumers are experiencing some sort of financial challenge that may be causing stress in their everyday lives.

According to a report by the Federal Reserve, Americans carry more than $2 trillion in consumer debt, and a Harris Poll reports that 30 percent of consumers report living from paycheck to paycheck. 

These and other reports reveal that financial literacy is a vital skill that everyone should work at throughout their lifetime. In school and at home, it is important for children to learn skills that will help them become financially responsible adults. 

Adults who continue to educate themselves throughout their lifetime help build a sound financial future for themselves and their families, and financially secure individuals and families help build a thriving economy. 

As we head into April, which has been declared National Financial Literacy Month to highlight the importance of financial education and to teach Americans how to establish and maintain healthy financial habits, it is a good time to focus on enhancing your financial education and that of your loved ones. From encouraging children to save their allowances to learning how to plan for a secure retirement, here are some tips you can use to help at each stage of your life:

Early childhood
Children learn by example, so model financial responsibility. Take your children shopping and show them how you shop wisely. Teach them how to identify coins, and encourage savings by using a whimsical bank to add an element of enjoyment every time your child makes a deposit.

’Tween and teen years
Aim to instill smart financial habits in children while they are still living at home.  If they are earning money through allowance or a summer job, establish a savings account to introduce banking concepts, such as interest and how compounding helps money grow. When your teen is ready for a checking account, many banks, including Union Bank, offer accounts designed especially for youth. 

Young adults
Whether away at college or starting a career, it is important for young adults to learn how to live within one’s means by establishing and living within a budget.

If they have student loans, a car loan or some credit card debt, it is critical to learn that timely repayment is important to establishing and maintaining a good credit history.

It is also wise to establish goals for the future and continue to save money toward those goals, including retirement, and learn about investment opportunities to grow their savings.

Adults
Home ownership, marriage and children may come into play at this stage, and each offers its own set of financial challenges and opportunities. Establishing a relationship with a trusted banker, or tax or financial adviser may help navigate these areas and offer advice on how to build wealth and help provide security for themselves, their families and their future.

It is also important to get into the habit of saving for unexpected emergencies.  Many experts recommend establishing a savings account to set aside at least six months’ worth of living expenses in case of a medical emergency or job loss. 

Seniors and retirement
In the golden years, many will have to learn how to live on a fixed income and stretch retirement savings. If not handled already, now is the time to work with your elder loved ones to make funeral plans and update wills, trusts and investments.

Janice France-Pettit is a senior vice president and regional manager for Union Bank, overseeing the Simi Valley, Santa Clarita Valley, San Fernando Valley and Antelope Valley region. The foregoing article is general information about financial literacy and is not considered financial or tax advice from Union Bank.  Please consult your financial or tax adviser. Ms. France-Pettit’s column represents her own views, and not necessarily those of The Signal. Visit www.unionbank.com for more information.

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