Just read this article in USA Today about young people that have graduated from college and are flying through life with little knowledge of personal finance. It doesn’t surprise me because this article just came out from Society of Human Resource Management (SHRM) that ranks each state in two categories: knowledge of personal finance concepts and application of those concepts in everyday life.
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The parental instinct to provide for your children can actually be detrimental to preparing them to be financially independent. Beacham says it’s an “unintended consequence” that leaves adult children unprepared to handle their own finances. “You feel like a good parent if you’re taking care of your child,” she says. “(But) the reason kids on college campuses don’t know anything about money is because they have no skin in the game because their parents are still paying. Their child is going to pay a much higher price for the lack of experience and knowledge they have on graduation day.”
So what can parents do to help students learn about personal finance? Take advantage of teachable moments, attend events that reinforce financial education principles, and provide resources to help students understand personal finance concepts.
Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com
Model financial education early and often.
I’m so happy to read that more educators are understanding the need for ongoing financial education. Children are learning about money from the time they are born. They are seeing you make it, and spend it, they are hearing you talk about it, they are forming opinions how about it should be spent. This article states it beautifully
And just like inoculations that require booster shots, financial education isn’t a one-time learning. We need to demand that it be taught in high schools and colleges. And we as parents need to have the “money talk” with our kids early and often.
I couldn’t agree more. I speak at elementary schools, middle schools, high schools, and colleges for that reason. You’d be surprised how many thoughts young people have about money. We have to start early and we have to talk about financial education consistently. More than that, we have to model the behaviors that we want to instill in young people.
According a study conducted by Charles Schwab, “nearly 9 in 10 say they want to learn how to make their money grow (89 percent). Two-thirds (65 percent) believe learning about money management is ‘interesting,’ and 60 percent say that learning about money management is one of their top priorities.” Do you know what that means? Young people want to learn about spending plans, acquiring appreciating assets, and creating emergency funds.
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The key to guiding students is making all the tried and true information about personal finance apply to every day life. It’s not that there are any new ideas about money management under the sun. Oh, there are folks that will try to tell you there are. Those folks are liars. The same old strategies work the best:
Don’t spend more than you earn.
Put your money into appreciating assets.
Invest for retirement as early as you can.
The challenge is getting these stogy old ideas to the younger generations in a fresh way. You’ve told your students/children/relatives to set goals for themselves, right? Have you every put it in the context of rapper 50 Cent’s career? You’ve talked to them about creating a budget, but you explained the merits of spending plans? Sometimes it’s not what you say, it’s the way you say it. You think they’re not listening, but they are. You think they don’t see your behaviors, but they do. Teens want to know more about financial literacy. Meet them half way.
I’m really looking forward to working with the Network of Empowered Women. Join us Saturday, May 29th at the Rita Walters Learning Complex in Los Angeles for a timely discussion about healing your relationship with money.
Order your copy of Money Matters: The Get It Done in 1 Minute Workbook before the workshop or pick up your copy on site.
The audio companion to Money Matters will be available online soon.
See you there!
While there are many things that children should learn, there are some things that all children need to learn. We have put together the 3 most important things that we believe children need to know about money.
#1 Teach About Marketing
Kids are being marketed to from the day they are born. How many times have we seen commercials directed towards toddlers? We have to teach our kids that the commercials are trying to manipulate them. It’s not the commercials are lying, however they are trying to get them to buy things that they may not need or want. The four most common appeals are:
· Appeal to emotion— “You’ll feel more powerful in these jeans. Be the woman you were born to be.”
· Appeal to popularity— “T-Pain eats this cereal. If you eat this cereal you’ll be more like him!”
· Appeal to frugality— “You can buy two of our product for the cost of one of our competitor’s item.”
#2 Teach About Critical Thinking
It is important that children learn to critically interpret the world around them. Everything from commercials to people they come in contact with are trying to pull the wool over their eyes. Teach your children to think about things before they do anything. Always consider:
· Who is asking something of me?
· What do they want?
· Why do they want it?
· What is the outcome of each action?
As it applied to money, this concept cannot be understated. As the saying goes, “everyone in life is buying or selling”. Helping your child evaluate a free offer from the sausage salesperson in the grocery store to the commercials online will change the way they look at the world.
#3 Teach About Respect
Respect for oneself, one’s family, and one’s community will save them a lot of grief in the long run. Respect for oneself will stop them from wanting to “buy” or “rent” friends. Respect for family will motivate them to want positive things. Respect for one’s community will give them the ability to go out and conquer the world. Having a solid foundation will allow them to go into any situation and be confident, patient, and able to make and manage their funds effectively.
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