It’s Time To Admit It … We’re Stupid About Money

By Gregg Murset | January 25, 2017

 

Every day I see more and more evidence that we’re totally stupid when it comes to money, and I’m not sure we’re going to get smarter any time soon. For example, according to the National Foundation for Credit Counseling’s (NFCC) “2015 Consumer Financial Literacy Survey”, 41% of adults gave themselves grades C, D or F with regard to their personal finance knowledge, 29% have not saved anything for retirement, 34% have no savings, 60% do not have a budget and 24% do not pay their bills on time.

Figures like these, besides troubling, have to be the result of years of poor financial education in our schools. Recent figures have shown that from coast to coast, millions of high school kids are receiving less than 15 hours of personal finance instruction during a high school career. Less than 15 hours to prepare someone for the complex world of credit cards, interest rates, student loans, investing and credit scores? And that’s just scratching the surface.

There is no doubt that in order to graduate from high school, a teen must complete at least one full year of personal finance. At a minimum, a teen should be exposed to how credit works, how to budget and know the basic terms of saving and investing. They should also understand income taxes, retirement accounts, credit scores and student loans.

So why are schools forcing kids to take classes to meet graduation requirements that are completely out of touch with what they really need to know once graduated? Maybe school officials are out of touch. Maybe they aren’t capable of teaching the subject. Or, maybe the funding isn’t there to support finance classes.

Let me ask this though … Can you name one subject that a high school student will use more after graduation than basic personal finance? I can’t.

Because of my background as a Certified Financial Planner, my kids will be prepared for what comes next as adults. What about yours? Sadly, I’m certain a large portion of our children learn about money by trial and error, and in a few years will be just like the adults surveyed above. As a nation we need this trend to change, and like it or not, parents will need to lead the change. Here are some suggestions on how to start:

  1. Talk To Your School

Finance will never be taught in 100% of our schools, however talk to your school about which classes cover finance. Unless you are in a district where finance is stand alone classes, the topic is covered sparingly in math or social science classes. Some knowledge is better than no knowledge.

  1. Start Kids Young

Start teaching your child about work ethic and money as early as possible. I actually believe that high school is almost too late to embed a successful routine that promotes a strong work ethic and being smart with money. Engage a platform like BusyKid to help build a strong foundation in your kids as early as 5 years old.

  1. Learn Together

If you don’t feel like your financial wisdom is strong, learn important topics, words and practice together at home. There are plenty of videos or reading materials on specific topics that can be found in multiple places.

  1. Practice What You Preach

Kids watch their parents and learn from what they see or hear. If you want your kids to be smart with money, then you need to do the same. Set a great example by comparing prices, reading the fine print and not overspending. Someday you’ll hear your child talk about the time they saw you do it, so they did it too.

  1. Set Goals & Budget

Every family member should have a budget and set some financial goals. You can make it into a contest of who has the most money in savings or who found the best deal. In any case, it’s important to budget and meet goals.

  1. Engage Experts

No one expects parents to have all the answers, so if there is an issue, call upon an expert for help. It might be as simple as understanding your options, but why not get the information from someone who knows best. Not sure what’s the best bank account or credit card for you? Take your child to a local bank and ask questions.