Look, there are tons of different books to teach your kids about money from very early ages, like helping your five year old learn the difference between sizes of quarters and pennies, to articles about giving or not giving allowance, to books like mine: Money Sucks! Money Strategies for Real Life (www.moneysucksthebook.com), which deal with how to write a budget, balance a checkbook, and other basic personal finance tasks.
They each have unique characteristics for different ages and styles of understanding, but the main agreement is that we MUST teach our children these types of tasks. Our schools have not yet decided to universally prepare our children for the vital job of managing their finances so that they are successful and stay away from consequences horribly out of sync with how easy they are to bring on themselves.
Consequences can include losing a job, not being hired for a job - if your credit scores are low (even if the job has nothing to do with money), losing a place to live, losing the opportunity to get credit for even a junky car, all for doing simple things like forgetting to pay a bill or bouncing a few checks.
These consequences are WAY out of whack in proportion to the deed, if you will. There is no guarantee that our kids will be exposed to these concepts, in order to avoid them. This is more dangerous, in some ways, than getting pregnant, arguably because only Half the population can get pregnant and All the population can get into money trouble. (Yeah, that's maybe overstating it a bit, but not much.)
We're showing, in my opinion, exactly why these concepts are so crucial, because home buyers who didn't read contracts were vulnerable to being coerced by those who knew the home buyers were undereducated; because stock managers looked out only for themselves and the corporate bottom line, rather than the financial health of their industry and our country; myriad ways that an undereducated citizenry can be manipulated On Purpose for profit and greed.
If you are reading this post, then you are likely to be a parent that wants to teach her(his) children as many important concepts for life success as possible. So, maybe this is preaching to the choir. But while we're teaching our children how to eat in a healthy way, how to stay away from strangers, how to assert themselves, how to cherish their inner creativity, how to have good self-esteem, it's up to us, at this point, to teach them things our school districts are not guaranteed to even approach.
I have read articles from parents who are outraged at the idea that any school system should tell their children how to manage money, as if it's a personal area of family values. So many families don't talk about money in the home, don't share salary information, savings information, estate planning information. It's almost a worse topic than sex.
Paycheck cashing companies and rent-to-own stores conveniently says that they "only deal with adults" and adults can make the decision to pay 391% annual interest on a payday loan. Well, who taught those adults how to manage their money, in the first place?
Immigrants to this country, in the thousands and hundred thousands, come here not understanding the U.S. financial industry. They then depend on English-speaking resident "experts" who may actually be ready to fleece each and every new client who needs their advice, like people who fraudulently pose as immigration experts and green-card procurers, as one example. They get their understanding of how the system works by trial and error or finding an actual "good" person who helps rather than takes advantage of them. Again, luck.
Luck is not what I consider "good public policy." I believe our undereducated citizenry is now not prepared to succeed in the international boundary-less world we live in. I believe that our country is losing and has lost international power and prestige due to a planned, though not necessarily criminally-agreed-upon, set of circumstances in the financial services industry.
Let's change our "luck." Let's not make money an optionally-learned topic. Do you agree?
Miryam Gordon is Board Chair of Financial Literacy Is Essential
and author of "Money Sucks! Money Strategies for Real Life" 2nd Edition.
and author of "Money Sucks! Money Strategies for Real Life" 2nd Edition.
