Financial Literacy Month

Yes, that's right, apparently April is Financial Literacy Month. Where do these things come from people???

But I like the topic, so I don't mind so much. Well, I found this article today on Make More Cents that talks about educating your children on money—which I think is SO important.

Throughout college (even today actually) I was often amazed at how many of my friends didn't have any concept of or experience with managing money. They didn't pay their own tuition or rent, didn't buy their own groceries or books. Their parents were supporting them and sending them little sums of money however often for whatever need.

I don't think it's wrong for parents to pay a child's way through college. But I do think that child has a bit of a disadvantage when they are suddenly thrown into the "real world"—especially if they've never taken any chance to educate themselves when they didn't need to.

So that's why I enjoyed the Make More Cents' post about important steps in educating children about money.

As the blog states:

Use our age-based plan as a guide and create a teaching curriculum for the month of April. Give your kids the financial literacy, personal finance and money fundamentals to ensure their success.

Just some excerpts:

Ages 3-5

• As they learn to count, teach them the difference between pennies, nickels, dimes and quarters. Playing “store” with children, using real change to buy things, is a fun way to teach them the value of the coins.

Ages 6-10

• Start your children on allowances, teaching charity, discipline and goal-setting. Keep allowances reasonable and the process simple. Allowances can be linked to chores or spending/saving responsibilities.

Ages 11-15

• Involve your children in family discussions around budgeting and goal-setting for large purchases. Studies have shown that family financial discussions are critical to having financially confident children by the time they are 18.
• Expose them to more complex financial terms and concepts, such as the stock market, IRAs and saving for college.

I especially think this second one is so important and one that is often overlooked. If I haven't said it on here yet, check out the book, "I Will Teach You to Be Rich."

Ages 16 and Older

• During this period, kids need to acquire the basic skills to live independently — managing a checking account, using ATMs and credit cards properly.

Obviously I am not a parent and there is a whole lot of financially stuff that I haven't even started to become aware of. But I do think that too many parents shield their children from finances, saying they are too young or too irresponsible. It is better that they learn how to manage money when they are young, rather than waiting until they are, for example, done with college and suddenly struck with rent, utilities, car payments, food bills, student loans, credit cards, etc. I can't imagine how overwhelming that would be to someone—many of my friends—when they hadn't been eased into it.

Just some random thoughts I thought I'd share. What are you thoughts about learning to take care of finances? What has worked for you? How did you learn? This stuff fascinates me so I'd love to learn.

signing off --KK