Did you know April is Financial Literacy Month?
I know, I know. There is a month or day for everything, but this is a topic I think we should all focus on as individuals and parents.
I work for a large financial services company, so I suppose I have benefited from learning a lot of great tips on the job. But truthfully, I’m also kind of a financial geek. I hate numbers, never liked math and largely stick to basic checkbook maintenance, but I love reading personal finance magazines and articles. As a Type A planner, I suppose I connect with the notion of saving and obsessing about the future.
- Does our emergency fund have enough cash?
- Are we saving enough in the kids’ 529 plans?
- Are the retirement accounts balanced?
- Should we give more to charity?
I’m wired to think like this, and anything I know about finances is the result of educating myself. My parents helped me set up a savings account at a young age, and advised me a little along the way, but most of my knowledge comes from reading and asking questions.
But think about those kids who aren’t drawn to financial magazines. How are they learning about money management?
Well, the answer is simple. They’re not.
With no financial education offered in our schools, the task of learning about money management falls squarely on the shoulders of parents. Kind of scary, huh?
A recent HSBC survey revealed only 49 percent of Americans are saving for retirement, and you know many of those savers are not even saving enough.
As a nation, we rely on credit cards and loans to get by, and we’re increasingly looking to the government to bail us out. I don’t know about you, but I’m not even factoring social security payments into my retirement plan. I have very little faith that it will be there for my generation. And for my own children? I feel like we are just piling more and more debt on their little shoulders.
So, what do we do?
I say we need to start teaching our kids about money today. I don’t want my kids to obsess about it, but I am starting to talk to them about choices and careers and the importance of saving and giving.
If you’re not educated, start learning with your kids. Now is the perfect month, and once you get started on your savings and planning journey, it’s kind of cool to track your progress.
So in the spirit of this month, here are five things you can do to start the discussion:
- Seek out resources to help you start the money dialogue with your kids. A fellow blogging friend of mine, Shannon Ryan, has authored several books on this very important topic titled, “The Heavy Purse.” I also turn to some great online resources like themint.org and Practical Money Skills.
- Get your child a piggy bank, or help them open a savings account. Talk to them about the importance of saving, and help them set a savings goal for a near-term or long-term purchase.
- Pick a charity to support as a family. Talk about why you want to support that organization and figure out ways the entire family can contribute. At church, we like to let our kids drop in some coins as the collection basket goes around. Sometimes it’s our money, and sometimes it’s theirs, but regardless they are making a connection that it is important for our family to give back.
- Start talking to your kids about your household’s expenses. My sons have started to learn about the cost of groceries and electricity and gas for the car. This has helped him understand why we need to say “no” sometimes, and how we need to prioritize our dollars.
- Help your kids brainstorm ways they can earn some extra cash. Perhaps there is a chore you can’t find the time for, or maybe they see an opportunity to do some yard work. Let them try to come up with some ideas though – it helps build their entrepreneurial skills and discover ways they can add value at home or in the neighborhood.
Yes, talking about money can be uncomfortable, but we must teach our kids how to manage it. If we don’t, we’re setting them up to fail in life.
Are you teaching your kids about money? Do you have any tips to share?