Don’t Let Your Child Be A Financial Failure in 2023
Nine signs your child needs to work on their money skills
By Gregg Murset
If you haven’t heard the famous stand-up comedy routine of Jeff Foxworthy, I would suggest taking a few minutes to pull some one-liners up on the Internet before reading the rest of this piece. Foxworthy has worked extremely hard over the years building a successful career by making jokes about real-life situations, as well as a particular class of people who might be “Rednecks”.
As millions of YouTube videos will verify, real-life can be very funny. However, it can also be very hard, especially if you aren’t prepared for it. Especially when it comes to matters of money. Numerous studies support what plenty of parents already see – kids not prepared to face the thousands of financial decisions waiting for them. Add to this a growing generation of kids with a poor work ethic and growing sense of entitlement, and many experts believe the hole we’re digging could be too deep.
Right now in the U.S, kids aren’t learning enough (if anything at all) about basic finance. In fact, only 23% of high school students in the U.S. have access to guaranteed financial literacy education. Depending on where your high school kids go to school, they may be required to take a combination of foreign language, high-level math (algebra) and high-level science (anatomy) in order to graduate. Why not finance? Can you name any other subject they could take that would be used more after high school than finance? I can’t.
Is learning how to speak French more important than learning about interest rates and credit cards? Is figuring out the value of X more important than knowing how to plan a monthly budget? Is dissecting a preserved animal as critical as understanding the differences between loans and how inflation affects us all?
It’s time for all parents to evaluate if their children are learning the basic financial information that will help them save, share, budget and make smart money decisions as adults. Conversations take place in almost every state over whether a standalone finance course and a test should be required for high school graduation. I’m not sure why we’re just talking about it. It’s a no-brainer!
So, what if you have a child between the ages of 5 and 17 and you are concerned with what he or she knows about earning, saving, sharing, spending, and budgeting money? Is there a way for a parent to tell if there is trouble ahead? Just watch out for these signs that your child could be heading toward financial failure and take corrective action at the first sign of trouble.
Your Children Could be Heading Toward Financial Troubles If They:
Say That Buying a Lottery Ticket is Their Retirement Plan.
While playing the lottery can be fun and helps many state run programs, it’s a bad retirement plan. Recently, the odds of winning the Mega Millions Powerball were somewhere around 1 in 302.6 million. Enough said!
Spend More Time Watching TV or Playing Video Games Than Helping Around the House.
Get your children off the couch or out of their room to do their share around the house. Besides building a daily routine, they will develop a good work ethic, demonstrate responsibility, get some exercise, and make your life easier.
Is Older Than 7 But Still Putting Money Into a Piggy Bank.
While piggy banks can be a cute way for a youngster to learn about saving money, what purpose do they serve after that? Almost none! Less than 10% of the money in the world is in the form of paper and coins so start teaching them about invisible money through online banking, rechargeable debit cards and apps for managing money.
Thinks Credit Cards are Free Money.
Some kids think that credit cards represent free money banks give away for people to buy things. There’s nothing free about credit cards once you have one. Until your children have a clear understanding of how credit cards, cash advances from cards and interest rates work, they shouldn’t have a card.
Learns About Finance From Comic Books.
A while back, one of the largest financial institutions in the U.S. offered a comic book where a well-known superhero fought a villain over bad financial decision. As parents, are we really that afraid of communicating with our kids about financial matters that we would rather leave it up to comic books and animated characters? If your children can’t learn about this important subject in school, let them learn from your experiences. You can become the superhero.
Has a Fall Back Plan of Moving Back Home if the “College Thing” Doesn’t Work Out.
Ok, so this is a bad news – good news situation. The bad news is that a survey revealed 50% of young Millennials plan to move back home with their parents after college and stay for at least two years. The good news is that these “boomerang” kids can lend a hand and do some chores around the house.
They Think that Budget Refers to a Rental Car Company
According to a recent survey, 68% of U.S. households don’t have a monthly budget in place. Kids learn a great deal by watching what parents do and it’s important for you to set a good example for your children and budget. Depending on your situation, you may not be able to save the recommended pay each year but save something.
Swears that the Term “Interest Rate” Means How Popular Something Is.
Definition Alert … An interest rate is the rate at which interest is paid by a borrower (debtor) for the use of money that they borrow from a lender (creditor). The best way to remember how interest rates work is the rate will most likely be high when you are paying back money and low if the bank is paying you money.
They Are Over 25 and Still Getting an Allowance From You.
Houston, we have a problem! If your child is about 25, living at home and still asking for money, something needs to change. Of course, there could always be a good reason why a grown child is at home without a job or income, but it better be a good one.
Many of these financial doom warning signs can be used to avoid a negative future if you start your children early on a routine of completing jobs around the house and rewarding them with an allowance. By starting around the age of 5, kids can learn work ethic, responsibility, accountability and how to manage money wisely. Using an educational tool like BusyKid will help parents assign tasks, motivate kids and reward kids when tasks are successfully completed. BusyKid uses the same technology (smartphone, tablet, or laptop) kids spend hours upon now, so it’s not a stretch for them.
So, as we roll into 2023, make teaching your kids about money a New Year’s resolution that can easily be kept and will pay you back in the future. No matter how you decide to do it your children will benefit. Just remember that education, communication, and hard work must be part of your plan. Otherwise, we’ll end up with a generation that thinks 401K’s is the newest flatbed Ford. By the way, it’s not.
About Gregg Murset
The co-founder & CEO of BusyKid, Gregg is a father of six, grandfather of two, certified financial planner and consultant who also became a leading advocate for sound parenting, child accountability and financial literacy. Gregg is considered a pillar of his Arizona community and has twice been named Chairman of “Smart Money Week” for the state of Arizona and was the 2014 National Financial Educators Council’s Financial Education Instructor of the Year.