For a long time, whenever my husband and I let our daughter pay for something at a store, she would excitedly collect the change from the shopkeeper like she'd won the lottery. In her mind, not only had she received the purchased item, she had made money, too. Despite the fact that she could add and subtract, and understood the math principles when counting things, dollars and cents threw her brain into a weird logic that we could not convince her was faulty.
Thanks to our repeated real-world lessons and what she learned in class in the second and third grades, I'm proud to report my kid now understands that getting change is not a payday. She is very careful with her birthday cash, planning how to spend it on toys she wants without letting her reserve dip below a certain point. Her dad and I take time talking to her about how she could spend her money, offering the pros and cons, and we include her in discussions about family finances as well. Our daughter knows money is a factor in the decisions we make: what jobs we work, where we live, what we buy, where we go to dinner and on vacation. I've even told my daughter how much I make—and why it wasn't as impressive as she thought.
Teaching kids financial lessons is important for their success as adults, and starting young with hands-on experience is the best way for parents to raise future grown-ups who won't end up living beyond their means, in debt, without emergency funds or retirement savings. No one dreams of raising a child who grows up to live paycheck to paycheck, but without including our kids in family discussions about finances, it's a distinct possibility. Many Americans do not follow the basic advice of financial planners—only 39 percent have the recommended funds saved to cover three months of expenses, 26 percent of workers between 45 and 54 haven't begun to save for retirement, and only 48 percent can completely cover a hypothetical emergency expense of $400 without selling something or borrowing money. Those are concerning statistics.
Not only do parents need to involve their kids in financial discussions, but schools should make money an important part of math class. When students complain they won't need to know how to calculate a cosine, they're largely right. It would be better if schools taught more about interest rates and how much that sweater bought on a credit card will end up costing in the long run, investment strategies and the rate of return, and how to budget for typical household expenses.
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I wish I had learned those lessons in school. It would have made my twenties a lot less difficult financially and I'd feel more confident now planning for retirement. If parents and schools work together, we can raise a generation who are better money managers than we are. There's nowhere to go but up!
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