October is National Financial Planning Month, but 68 percent of Americans probably won't take notice because they don¹t put together a monthly budget to track income and expenditures, which might explain why over 46 percent of households have credit card debt averaging $15,257 per household. Personal money management is not likely to improve in the next generation either.
There is no requirement in 66% of states for students to take personal finance courses in high school, and since most parents are not budgeting most kids aren¹t going to learn these valuable life skills at home either. Additionally, a study by the National Endowment for Financial Education found that 89% of teachers believe that personal finance should be a mandatory class, but only 20% believe that they could competently teach that class.
To help increase your kids financial literacy, I have the opportunity to post these tips, courtesy of Greg Murset, CEO of LeapSpring.
- Teaching Kids The Basics … Kids need to know the basics about work ethic, earning, saving and sharing, so parents should step in and teach their kids what they (the parents) know. Stick to the basics to lay a good foundation.
- Use Real Life … Parents can use their real life experiences (good and bad) as “teachable moments” for their kids. Though 33% of parents find it easier to talk about sex, drugs, smoking and bullying than “money matters”, parent examples can be a powerful lesson for the kids to hear.
- No Jars, Envelopes or Piggy Banks … While there are many differing opinions about “virtual banks” for kids, forget the fake and open a real savings account for your child and set up a regular deposit each week or month. Kids need to know how banks work, so get them involved in one now.
- Have Kids Pay For Special Items … Parents should let kids spend their own money for items that may be considered extra, special or not on the necessity list. Kids can get a quick lesson on what items cost when it’s their money that is being spent.
- Make Kids Earn Spending Money … The best way for kids to learn about work ethic is to actually work. Having kids help around the house is a great way to teach them about responsibility, accountability and earning money. Once they have earned money, require them to save some and share (donate) some before being able to spend some.
- Speak To Your School … If Personal Finance or Economics isn’t being taught at your local school and you believe it should, talk to the principle about how you can help get the courses implemented.