Lessons for your kids now for financial success later
Financial literacy is one of the most important educational subjects that anyone can learn. Unlike other subjects, financial literacy has dramatic, ongoing implications for a person's life. What's more, studies indicate that our children are eager to learn: one recent study showed 50 percent of the students surveyed wanted training in money management, while only 14 percent had been offered any.
Whether you're teaching children the basics of how money works or preparing them for the financial real world, the evolving topic of financial literacy never really becomes obsolete.
Financial Literacy Month – April – makes a great time to talk with your children about money. Here's a closer look at what's working and the resources that can assist parents in meeting their goal.
Establishing a Baseline
Because financial literacy is an evolving subject, it's important to understand what your children already know and identify any bad habits they may be forming. Children are learning about money daily – they pick up financial characteristics through social media, traditional media, their friends and the biggest influence comes from their parents.
According to the National Financial Framework and Standards, age can provide some general frame of reference, but it's important that financial literacy training be customized to fit the needs of your children. One way to do this is by asking your kids to complete a basic financial literacy assessment. This will provide some context for your instruction and also help you measure whether you've been successful over time.
Following a Dedicated Curriculum
Unlike many other subjects, bad information during the course of financial literacy training can have devastating consequence. Misinformation can lead your children to make decisions that drastically alter the course of their lives in a negative way, while the right information can help people get and stay on track to achieve their financial, professional, and personal goals.
One of the best ways to ensure that the instruction being given is appropriate is following an established curriculum. It is also important to talk with your children about money. Use daily activities to teach them comparison shopping, budgeting and good money management habits. Involving your children in hands-on exercises and simulations to help make learning interesting.
It's Never Time to Stop Learning
Another element that's important to acknowledge in the financial literacy discussion is that you and your children really never stop learning. The lessons you share with your kids will change as they mature. For example, for younger children we can teach them the basic principles of loans through sharing and trading activities. As they mature into their high school years, this base level of knowledge will provide a foundation to help them understand the process of qualifying for a college or car loan.
Financial literacy is an essential component of raising independent children, and one that's too often neglected. Financial literacy is an ongoing need and one that pervades all areas of our lives. By recognizing that it's possible to teach this important issue in an ongoing manner, parents have the chance to make a real difference in the nation's level of financial literacy.
Financial literacy resources are available on the National Financial Educators Council's (NFEC) website at www.FinancialEducatorsCouncil.org/financial-literacy-curriculum.
Kimberly Knox is a member of the National Financial Educators Council's Personal Finance Speakers Association. She leads presentations for the SunTrust Foundations Center for Financial Education at Wake Technical Community Colleges and contributes to other NFEC programs.
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