Never Too Young For Financial Literacy
As parents, the range of topics you cover with your children evolves and expands every day. Some of those conversations are easier to have than others. One such topic families may struggle to cover is money and financial literacy. Kids have to learn about money somehow, though. So who are they learning from?
From schools? Not likely. Only five states in the country (Utah, Alabama, Missouri, Tennessee and Virginia) require a semester’s worth of personal finance classes in their public high schools. Unless you are lucky enough to live in one of these states, you as the parents or guardians will have to take the initiative to foster financial literacy among your children. Where else are they going to get the information?
From friends? Kids teaching other kids about money usually doesn’t turn out well. From some friends, they might get the impression that money appears without work. From others, they might adopt a snobby attitude toward those who have less. Still from others, they might take on an overly worrisome attitude toward money, wondering if there will be enough and obsessing about how to get more. Any of these approaches will result in your kids having a dysfunctional view of money as they head into adulthood.
From credit card companies? As your kids (now young adults) head into college, credit card companies are all too happy to lure in the financial ignorant (as opposed to financial literacy) with the promise of ready funds, at the price of high-interest cards. Not to mention student loans. As of 2016, student loan totals in the United States are more than $1 trillion. Still think that talking about finances with your kids isn’t a big deal?
The time is now to equip your kids for their future, one that is less saddled with debt and instead, empowered with freedom and knowledge. Where do you start? It starts with taking a look at your own attitude toward money.
Adjust Your Attitude
What is your attitude toward money? Do you set an example of handling bills carelessly, acting defensively toward the subject of money, or refusing to look for solutions? If that’s the case, it’s possible your kids will grow up with an impoverished view of money. On the other hand, if your own account is healthy, maybe you want to avoid being accused of the parent who constantly talks about money. How then will your kids understand the hard work and sacrifices it took to get there? Your own inadequacies don’t disqualify you, and your successes don’t over-qualify you. Teach from where you are. No one is expecting you to be an expert in every in life, money included. Remember that more is caught than taught, so the next time you get a bill or write a check, check your own attitude. Little eyes are watching.
Cast a Vision
Once you’ve checked your attitude, that should reveal what kind of vision you are casting for your kids about money. Help your kids understand that money is not free; it doesn’t grow on trees and it certainly doesn’t “come” from the ATM machine. Even at a young age, kids can begin to understand that if they want a toy from the store, that will mean they have less money in their piggy bank at home. Also at a young age, help them explore the power of charitable giving, whether it’s to a church or a local charity.
Encourage kids and teens to set savings goals to practice delayed gratification. Maybe there is a video game, new toy, or fancy pair of sneakers they are desperate to own. Help them set a savings plan starting with the price of the object and planning out how they can earn and save to reach that goal.
While encouraging them to save, introduce your kids to new ways to make revenue. That could range from a summer landscaping business that turns to raking leaves and shoveling snow in the fall and winter, to babysitting, tutoring, or running the next family garage sale. There is no shortage of ideas, and you may be surprised by what business ideas your young entrepreneurs come up with on their own.
In addition to casting a vision for earning and saving, introduce your kids (at the appropriate times) to the basics of financial literacy like opening a banking account, checking the balance regularly, writing a check, reading a utility or insurance bill and the basics of credit. These things are common occurrences for adults, but completely foreign to kids (and let’s face it, still foreign to some adults). But that’s no excuse to gloss over them with your kids. The more familiar they are with these responsibilities, the better equipped they will be to handle these details when they are on their own.
As parents, that’s all part of the job. Equipping your kids to not just be successful adults, but having the ability to keep learning how to be successful. Part of being financial savvy is understanding that no matter what problem you face; the problem will never go away by ignoring it. Debt will never disappear by ignoring the balance. Your account won’t grow if you keep spending more than you earn. Your savings goal won’t be met if you only think about putting in more money, instead of actual doing it. There are so many resources to help educate, plan and organize finances that there’s no excuse to not reach those goals. Teach your kids to be good learners, as you yourself never stop learning about how to become more financially savvy.