From Gregg Murset, CEO of LeapSpring:
I don’t believe that parents really think about the long-range implications of their kids not knowing about personal finance from a young age. Knowing about work ethic and money management are the foundation to everything our kids will do for the rest of their lives. Without the basic knowledge of personal finance, our children are just one or two bad decisions away from a life full of frustration, disappointment, debt and bad credit. Since our kids don’t receive this foundation from our schools, it’s important they learn as much as they can from an early age through their parents or other outside experts.
Summer is just memories and schools are back in session. But, according to a recent report by the Council for Economic Education, a majority of students will once again fail to learn any of the basic personal financial skills they will need later in life.
The Three Big Reasons the Majority of Our Kids Won’t Gain This Useful Knowledge Are:
- 66% of states in the U.S. have no requirement for subjects like Economics or Personal Finance in high school.
- Though 89% of teachers believe that Personal Finance should be a mandatory class, an overwhelming majority of teachers don’t feel they know how to teach these subjects.
- Kids are intimidated by the subjects and stay far away as schools most often make finance courses, when available, an elective along with drama, choir, band, art and student council.
So if our kids can’t learn basic financial principles at school, what should they do and how can parents help? Gregg Murset, CEO of LeapSpring, Inc., believes that the burden must shift to parents to help ensure their kids are prepared for what’s coming next as teenagers and young adults. Murset recommends the following for parents:
– 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.