Helping teens develop financial literacy
MISSION, Kan., September 29, 2022 /PRNewswire/ — (Family Features) Developing financial literacy and effective money management habits are important steps for teens to become financially stable adults who aspire to build assets and achieve personal goals.
For example, most teens (88%) would like to own a home someday, according to a survey conducted by Wakefield Research on behalf of Junior Achievement UNITED STATES and Fannie Mae. The survey of 1,000 adolescents aged 13 to 17 in United States most (85%) believe that “owning a home” is part of “the good life,” compared to almost as many adults (87%). However, less than half (45%) could correctly identify the definition of a home loan and 76% said they did not clearly understand credit scores.
“There has been this theme that young Americans are not interested in home ownership, but the results of this survey contradict that assumption,” said Jack E. KosakowskiPresident and CEO of Junior Achievement UNITED STATES. “Teenagers seem interested in owning a home one day, but seem to realize they need more information on how to do so.”
To help teens better understand the financial decisions they’ll face as adults, consider these common terms.
While nearly all teens (96%) believe credit scores play an important role in being able to buy a home, about 3 in 4 (76%) said they only understood “somewhat” “a little” or “not at all” credit ratings. .” A credit score is a number between 300 and 850 based on a number of factors including credit history, open accounts, total debt, repayment history, etc. Lenders use credit scores to credit to assess a person’s ability to repay their loans.
A person’s credit score can also determine the amount of a down payment needed when buying a smartphone or a house, or the deposit needed to rent a property or obtain utilities and can have a impact on interest rates and credit limits on credit cards. Generally, scores below 620 may require paying a higher rate, shorter repayment term, or co-signer. Scores of 700 or higher are considered more favorable to creditors and may lead to lower interest rates, while scores above 800 generally offer the most benefit to consumers.
While a slight majority of white teens (52%) correctly identified the definition of a mortgage, only about a quarter (26%) of black teens and less than half (41%) of Hispanic teens or Latinos could do it. A mortgage is a type of loan used to buy or maintain a house, land, or other types of real estate. The borrower makes a down payment for part of the purchase price and then borrows the rest from a lender. The borrower then repays the lender over a number of years – usually 15 to 30 years – through a series of regular payments which are divided into principal (the money originally borrowed) and interest, with the property serving of guarantee.
Almost all teens surveyed (97%) thought it would be helpful if schools offered courses explaining homeownership, including mortgages. In response, Fannie Mae supports the development and deployment of Junior Achievement learning experiences for thousands of students each year across diverse age groups by integrating relevant content from its Junior Achievement course materials and resources. HomeView property, which are designed for first-time home buyers.
“Today’s youth are tomorrow’s shoppers,” said Jeffrey Hayward, Executive Vice President and Chief Administrative Officer, Fannie Mae. “By giving them access to quality basic education now, Fannie Mae and Junior Achievement are helping these future homeowners prepare for the mortgage and home buying process when they are ready to take that step. “
Visit ja.org for more tips and information to help teens improve their financial literacy and achieve their goals.
Photo courtesy of Getty Images
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SOURCE Family Feature Editorial Syndicate