How Bank of America in the Twin Cities can help young people with their major financial milestones

Talking about finances isn’t always an easy thing to do, especially if you happen to be speaking with a member of Generation Z or a Millennial (young person born in the mid-1980s to mid-2000s). Young people can often be found with some kind of device in their hands, earbuds in their ears or sharing videos with their friends on Snapchat. It’s often hard to find a moment when you’ve got their undivided attention, whether you are a peer or parent.

Becoming financially literate is an integral part of entering adulthood. But sometimes, it can be awkward for adults to bring up the word “finance” around young people. In fact, a survey showed that parents are nearly as uncomfortable talking to their children about money as they are discussing sex. Yet, it’s the duty of adults to guide young people on financial topics as they reach major milestones in their lives such as getting their first job, going to college and even buying a home.

As someone who works in the financial services industry, I understand how essential it is to make time to talk with young people about this important topic because it will impact their entire life. However, adults are not expected to be financial experts on their own and there are great resources and materials available to aid in these conversations. For example, the company I work for, Bank of America has partnered with Khan Academy to develop BetterMoneyHabits.com, a free online resource that combines Khan Academy’s expertise in online learning with our financial know-how to deliver unbiased and easy-to-understand information on a wide range of personal finance topics.

However, there are other ways you can jump start the conversation at home as well. Here are some ideas for talking about finance during key life moments where a little adult advice comes in handy.

First Job: First job means first paycheck and first big spending decision. This is the perfect time to help Twin Cities teenagers and young adults understand the importance of saving money and how to budget to avoid overspending. The word budget may seem scary to some, but it’s simply knowing how much you make and how much you spend. Inspire those new to budgeting to think about their monthly expenses, items that they’d like to buy and then show them how much they have left over, if any. Talk to them about needs versus wants and how to make trade-offs. A significant part of any budget is savings. If aiming to buy a big-ticket item (new computer, new car) it can help motivate them to start saving. Routinely setting aside just a bit of money for savings is a valuable habit to teach young adults and even children. Having the discipline to regularly put aside money is hard enough for many adults, and learning the habit of saving early can make saving throughout one’s life much easier.

First Credit Card or Loan: The credit conversation is a tough one. The average American household carries more than $7,000 in credit card debt and nearly two-thirds of college students graduate with some form of student loan debt. Yet despite our reliance on plastic and loans, few adults know how to explain the complexities of borrowing money. Thankfully there are many resources available to help adults and parents alike, such as your Twin Cities Bank of America locations and online sites where you can get more information on how credit works in your community. Even if your financial knowledge is limited, guidance is critical in teaching young adults to ask good questions when making financial decisions. This will help young people avoid making impulsive decisions and potentially taking on too much debt early in life. Some of the questions we regularly have customers ask themselves while onsite at our Bank of America financial centers include:

• Is this purchase or loan necessary? Do you need it right now?
• Could you save money for a few months to pay for it instead of borrowing money?
• Do you have enough money in your budget to cover the monthly payment?
• Does this purchase or loan affect your ability to pay for a future expense?

First Home: Young adults might also be talking to the influential adults in their lives about purchasing their first home here in the Twin Cities. Buying a home is a big purchase and one way you can help prepare them for a purchase like this is to have an open conversation or refer them to a representative at a local financial center. Speaking with educated individuals on the process encourages them to think about the decision and answer questions like:

• Can you afford the monthly payment?
• Do you have enough for a down payment?
• Do you plan to live there for at least five years?
• Do you need help from me?

This last question is an important one. According to a recent Bank of America Homebuyer Insights Report, two-thirds (66 percent) of first-time millennial buyers still expect some type of help from their parents when buying a home, ranging from financial support to assistance moving in. There are many ways you can help young people with their first home – whether it’s giving them a gift for the down payment, helping them co-sign or providing them with a loan. However, you need to be clear on what you can do and talk to experts (like a mortgage officer, CPA or lawyer) to understand the best way you can provide assistance.

Financial decisions are often difficult conversations, but they are essential for one’s growth. Working in finance, I have seen what a difference these types of conversations can have on how people approach their everyday financial needs and decisions they make. The trick is to start early and over time, people will learn how to live healthier financial lives.

Sarad Tomlinson, CRPC, is Vice President - Market Sales Manager at Bank of America Merrill Lynch overseeing the Twin Cities market