What if you were told that 70% of American children are not literate? You would probably snap back, “That’s not true! Unbelievable!”
But it is true if you consider financial literacy. According to experts, as many as 53% or more of American adults are financially illiterate. They have not learned the basics of balancing a checkbook, paying bills, investing in the stock market, real estate, or other financial skills or principles that would rank them among the group of adults considered financially literate.
Yet so much of our power and ability to orchestrate our lives depends on our relationship and understanding of money and the financial system. Without financial literacy, it is difficult to achieve financial security, make informed financial decisions, or build wealth.
Don’t you think it’s time to focus on teaching our children about finances?
According to Mellody Hobson Lucas, who recently released a book Priceless Facts About Money, it is important to teach children the ins and outs of finances. The financial expert says her mother began teaching about economics at the age of six. Hobson, the wife of Star Wars creator, George Lucas Jr., and the president of Ariel Investments, states that approximately 77% of people have anxiety about money.
How can parents begin their journey of teaching children financial literacy? By modeling wise financial decisions in their own homes.
- Set a goal to avoid high credit card debt.
- Set smart spending goals.
- Begin to build a rainy day fund to prepare for emergencies or an opportunity fund to have money to invest.
- Make your child a part of your financial life by sharing your money goals and spending decisions in an age-appropriate manner.
- Help children make plans to use their allowance and monetary gifts by budgeting in saving, purchasing, and giving.
- Allow your child to pay at the check-out counter. Does she know to add on taxes? At the restaurant, can she figure out an appropriate tip?
Be conscious of building in everyday activities aimed at increasing children’s financial knowledge. Asking and answering questions about basic financial concepts and role-modeling savvy financial decisions will all add to your child’s growing financial literacy and your own.
Lucille is the author of several books, including The Eyes of the People.
