The school year is finally winding down! Your child's head is full of science, math and history facts and you are already onto summer planning.
As important as math and science topics are, there are some skills most schools don’t teach. I’m referring, of course, to financial skills.
It’s hard not to overstate this fact: learning the basics of good finance is just as important as learning “how to solve for x” or “what year Magna Carta was written.” That’s because everyone, regardless of who they are or what they want to do for a living, will have to take control of their finances at some point in their life.
A 2015 article in Forbes® magazine by Jennifer Ryan Woods had this to say:1
"Because most schools aren’t teaching finance, the responsibility falls to parents. But many parents are reluctant to broach the subject, often because they don’t feel qualified or they think talking about money will make their children worry. In a recent study, 72% of parents reported at least some reluctance talking to their kids about finance. But that doesn’t mean they don’t want their kids learning it—91% believe it’s appropriate for kids to learn about financial matters in school and 75% said there should be a personal finance requirement to graduate."
Until that time, however, it will continue to be the parents’ responsibility to teach financial skills to their children. Fortunately, it doesn’t have to be difficult. The same article quoted above suggests that simply helping kids understand basic financial terms is a good place to start. You should definitely read the full article (you can find a link to it at the end of this letter), but in the meantime, here are the 11 words mentioned in the article:1
- Saving (age 4+)
- Budget (age 8)
- Loan (age 8)
- Debt (age 8)
- Interest (age 8-10)
- Credit (age 8-10)
- Taxes (age 10-12)
- Investment (age 10-12)
- Stock (age 12+)
- 401(k) (age 14+)
- Credit Score (age 15+)
So as another school season winds down, remember: saving can be just as important as science. Budgeting is just as critical as biology. And finance is certainly the equal of learning French. That’s why teaching basic financial concepts to children is one of the most important gifts any parent can give.
One last thing. Here at Retirement Financial Advisors, LLC, our door is always open to helping parents and grandparents educate the next generation on how to achieve financial success. So if there’s ever anything we can do to help you pass on the skills you’ve learned, please let us know.
If you want to read “11 Financial Words All Parents Should Teach Their Kids” (and you should) you can find it here: http://tinyurl.com/hmzrbhr.
1 Jennifer Ryan Woods, “11 Financial Words All Parents Should Teach Their Kids,” Forbes Magazine, June 8, 2015. http://www.forbes.com/sites/jenniferwoods/2015/06/08/11-financial-words-all-parents-should-teach-their-kids/5/#122578472922