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Who is Teaching Your Child About Money

April 10, 2010

Is it your child’s school, is it you or are they figuring it out as they go?

You Cannot Count On Others for Your Children’s Future

For those parents who answered my children are being taught about money in school, you have been misinformed.

According to the Jumpstart Coalition for Personal Finance, an organization who administers a personal finance test to high school students across the country, test results show failing grades for four years in a row.

There are those few amazing teachers who will take it upon themselves to weave financial literacy into their other subjects, but they are the minority.

It is hard to expect teachers to teach a subject they were not educated about themselves. Beyond writing a check and balancing a checkbook they may have no knowledge about investing like so many Americans.

Are You Equipped to Teach Your Child?

Some parents believe it is the families’ job to educate their children about money.

For those parents who say it’s their job, my question is who taught you?

Unless you were fortunate to have a parent who has worked in the financial industry or who was an entrepreneur, how are you qualified to teach such an extensive topic?

Forty years ago workers had pensions so learning to invest was not necessary for everyone. People had their pensions and social security and that was enough to live on in retirement. Then in 1974, “Defined Contribution Plan” (now known as the 401K) forever redefined retirement planning.

Companies started eliminating pension plans and offering 401k plans instead. What employees did not realize is that in doing so, they are now responsible for their retirement income instead of their employers.  Most employees (even today) is ignorant of that fact.

This transition of making the employees masters of their retirement happened without proper education for the employees to make informed decision on how to manage their money.

Thirty-six years later it’s amazing that only three states in the country have a required one-semester course of personal finance in high school. While that is better than none it is still unacceptable. Check out Jumpstart.org to see what the requirements are for your state.

Studies show saving and spending habits start as early as six years old.

High school is too late; spending habits are already in place.

If you’ve been spending every cent you have received since you were five it’s likely that spending behavior will continue into adulthood unless a serious shift in education takes place.

It is up to you!

If you still have young children at home be aware it is up to you to make it a priority to share whatever financial information you have with your children.

If you are lacking financial education like so many Americans you may be learning right along side your child.

We owe it to our children to make financial literacy a priority.

It is time we get back to the basics of having an emergency fund, saving for whatever the must have item of the moment is, only investing in things we understand, giving to people less fortunate then us and spending wisely what is left over after all those other things are done.

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