Teaching Kids about Money
It seems that almost no one is teaching their kids about money. Each year the Federal Reserve does a study to see how much high school and college students understand about money. The average high school student scored a 48 out of 100, while the average college student only got a 62. This means that the average American fails to grasp a basic understanding of money. Why is this happening? I think the reason is three fold
1. Schools do not teach the basics about money. Home economics is not about the economy of the home. In most schools there is no real mechanisms to show how to balance your budget or what debt actually costs you over a long period of time.
2. It has become impolite to talk about money. People find it offensive to be candid about how they handle their finances. This is probably because…
3. Parents are misbehaving with their money. You see if we do not talk about it we do not have to evaluate what we are doing with our money. Simply put out of sight out of mind. If you are handling your money, poorly and you have children, the only thing you are teaching them is how to handle money poorly. This is a great reason to get your finances straight so that you can model proper behavior for your kids. Also, by reigning in your mismanagement, you are able to properly save for retirement and for their college. Now instead of saddling them with taking care of you in your old age and with large college loans.
So if you don’t know anything about money go out there and watch a video or read a book. If you don’t even know where to start I would look at I Was Broke Now I’m Not. It is the story of how Joe and Jenn Sangl went from spending more than they made to having enough surplus that they could take a 50% pay cut in order to follow their dreams. It teaches all the basic principles you need to win with money and has links to tons of free tools to help you along the way.
June 12th, 2008 at 11:31 am
Great point about parents. Schools are not teaching kids about money and we as parents have to pave the way. We have to be great examples of saving and investing money.