A 2006 study at Indiana State University (McCormick and Godsted: “Learning your Monetary ABCs”) concludes that teaching financial skills to young children is just as important as the teaching of reading and math.
Why begin financial education at such a young age? It’s logical. Exposure to financial subjects at an early age instills fluency as the child matures; it’s much the same as learning a second language.
Simplified instruction in spending, saving, goal setting and charitable giving should be taught to pre-K children. More detailed instruction beginning in elementary grades and continuing through high school should include such topics living within a budget, credit card responsibility, retirement planning and the consequences of making poor financial decisions that result in poor credit ratings and bankruptcy.
A simple outing to the grocery store or shopping for back-to-school clothes can provide a teaching moment for parent and children.
A related and current hot topic is the ever increasing cost of college education. A high school student and his or her parents should openly discuss and research affordable college options as early as sophomore year in high school. Discussion topics should include the over-all cost of a college education (tuition, books, room and board, and transportation), the opportunity to earn college credits in high school and junior college and alternative job training options for those students who are interested in a career that does not require a 4-year college degree.
So, take the time to include financial literacy as part of the parent-child relationship. It’s as easy as 1-2-3.
At Strategic Wealth Planning, we develop personal financial blueprints for our clients that safeguard their families, strengthen their business or professional practice and preserve and enhance their estates. At SWP, education is an important part of the adviser/client relationship because it ensures that a client thoroughly understands all available options. For a confidential meeting or for a second option, call 214.727.6000.