I’m the first to admit that I had a lot to learn about personal finance. And sadly, I didn’t get smart about it until a few years ago. While I might have come a long way, I’m still learning.
All of this leads me to wonder: just how qualified am I – and other parents – to teach kids about money?
How can someone who happily spent every paycheck – thank goodness, I never got into debt – teach someone the importance of saving early? It would have been a whole lot more meaningful to point to a large bank balance than it is to share a litany of regrets.
And what about the parents who are struggling with credit card debt, who are underwater with a mortgage they never should have signed or who are constantly buying things they cannot afford? What lessons are they able to teach their children?
Personal finance is not common sense. Especially in the 21st century. Even something as simple as a cell phone plan can catch you out with unexpected fees. And don’t get me started on figuring out health insurance options.
If we want the next generation to avoid repeating history with another Great Recession, we need schools to help parents educate kids about personal finance.
Martin Lewis, “an award-winning, campaigning TV & radio presenter” in the UK puts the situation in perspective far better than me. Take five minutes to listen as he explains why financial education in schools is now more necessary than ever. His examples are spot on for explaining why personal finance is not common sense and shouldn’t be left to parents.
So, what should we do? Well as a first step, educate yourself as much as possible about personal finance. (A good book to start with is Smart and Simple Financial Strategies for Busy People
by Jane Bryant Quinn. See my review over at Get Rich Slowly.) Start figuring out the emotional drivers behind some of your decisions. Look at how you are spending your money and consider it with the eyes of your child.
As for the bigger picture? There, I get stuck. A starting point would be checking out JumpStart Coalition for Personal Financial Literacy. But I’d love to hear other suggestions on how parents can push for financial education in schools.