Financial education is something that everyone needs. There is no way around it and there is nothing that should stop it from happening. There are millions of people that are in debt and don’t know what they will do about their future because they don’t know anything about finances or how to successfully manage it.
Being educated about finances isn’t something that is only reserved for people that have a huge net worth. Financial education is something that everyone needs because it will help people make better decisions with the money they do have. As people begin to think about their comfort with money, most are surprised to admit they aren’t comfortable with their financial education.
When to Start Being Educated?
Most people think a college education will guarantee financial education. It doesn’t. There are millions of college graduates, young and old, those has faced or are facing financial devastation and ruin because they don’t have a good grasp of their finances. The best time to begin educating people about money and finances is as a child. When children begin getting an allowance is one of the best opportunities to begin teaching financial responsibility.
There are some parents that don’t understand why a child should be taught about finances at such a young age. They don’t realize that money habits are formed when people are children. These habits are formed by watching the adults around them and what they are told to do with their money as children.
Many kids are allowed to do what they want with their allowance when they are children. Their parents don’t tell them they will have to save any money for an expensive toy or trip they want to take. Most parents think it’s adorable when their child gives a cashier money for a toy or book they want for the first time. While it’s cute, it can help for a habit that child takes with them into adulthood.
As these kids grow into teens, most parents expect their child to get a job and start being responsible for one or two things but allow them to continue spending their money as they see fit. Many parents don’t sit down to talk to their children about retirement, savings and what financial responsibility really means. There are some parents that don’t talk about the pitfalls of poor financial decisions and how this will affect their credit.
Children are the future and parents need to take their children’s financial health seriously. This is something that will help lead a child to success in life. Parents should talk to their kids about money and start teaching financial responsibility as soon as they give their children an allowance.
How to Teach Financial Responsibility
Parents that want to teach their children about financial responsibility have many opportunities each day to do so. There are some parents that have turned financial education into a game and there are winners each month. There are others that take their children to financial planners at a young age and allow them to actively participate in financial decisions.
Parents can give the best introduction to financial education by discussing their financial situation. Some parents don’t feel comfortable with doing that because their financial house is not pristine or in good shape. It is those lessons that children need to learn so they can avoid it in their future. Once the conversation has been started, most kids will tell their parents what they need to learn through the questions they ask. As parents open themselves up for those conversations, financial education will happen naturally.