education.com

Fostering Your Child's Financial Literacy

by Zrinka Peters

Everyone knows that young people are pros at spending money; millions of dollars are spent annually on advertising aggressively directed towards them. They know how to use ATM machines to take money out. But, in these uncertain economic times, do they know how to save it? And do they know how to think long-term – beyond the weekend – about their finances? What about credit card debt? Or investing for the future?

The National Council on Economic Education (NCEE), a nationwide organization that serves to promote financial literacy with students and their teachers, has this to say on its website: “NCEE surveys show that nearly half of our young people don't understand how to save and invest for retirement, nor how to handle credit cards, don't know the difference between inflation and recession, nor how government spending affects them. If we fail to act now to improve economic literacy in this country, our children will be at risk for crippling personal debt, costly decisions at work and at home, and lack competitive skills in a fast-paced global economy.”

Robert Duvall, PhD,  President and CEO of NCEE, says, “We know that the skills of managing your money well, are not skills that you’re born with. It’s learned behavior.” And according to many experts, the younger kids start learning about financial management, the better. Many schools now offer some form of financial-management class, particularly at the high school level. But parents are still their child’s first teacher, and can have a great influence on their child’s financial education. Paul Golden, a spokesperson for the National Endowment for Financial Education, a nonprofit foundation dedicated to improving the financial well-being of Americans, says “Teaching children good money sense must start in the home. Parents should invest time talking with their children about money and how to use it appropriately.”