Financial Literacy – For Kids and Adults

Despite the current foreclosure crisis that seems to be the topic of virtually every newspaper these days, the need for personal financial education (financial literacy) is not a new concept. Indeed, the fact that the U.S. savings rate is at an all-time low, while the personal debt rate is at an all-time high, demonstrates just how important financial education is to our future (and the future of our kids). A large number of parents (myself included) are hoping to be able to either leave their children with a legacy (a small financial cushion at a minimum), or to at least be able to provide them with the means with which they can obtain the tools to help them along in life (money for college, education or business funding). But the ultra-consumptive mindset of many in my generation has led to bad financial decisions in which there was often times no thought of a “rainy day” much less tomorrow.

For many, it is now raining, and raining hard. That’s not really the unfortunate part… because rainy days are always ahead of us. What is unfortunate is that the same reason that some people are in the crisis that they are finding themselves in is the same one that got them there in the first place.

It seems that no one wants to talk about financial literacy. The word literacy seems to imply “illiterate” for folks, bringing forth images of being somehow “less-than”. You can see it even within the financial literacy movement itself, where folks are changing the name to “personal financial education” in order to not offend (and in my opinion, to sugar-coat so that people will be more receptive to hearing the message of financial education).

While my generation is busy trying to figure out what is the politically-correct way to phrase the fact that they didn’t learn as much as they should have about the financial sector of their lives, the next generation is set and poised to make the same mistakes or worse. Let me be the adult that my son needs to see and hear. Let me raise my hand, stand up, and say that I made some horrible financial mistakes in my younger years, I wasn’t taught anything about finances by my teachers in school, and my parents, though they told me that I should “save”, didn’t tell me why I may need to (and therefore I didn’t). I left school and home with all of the A’s and B’s in math, reading, science, etc., and then turned around and failed miserably in my personal financial life. I’ve been spending the better part of the last 13 years correcting those mistakes, turning my financial life around, and learning and living a healthier financial lifestyle.

While I don’t place blame on my parents for my lack of financial education (challenging to teach what you don’t know yourself), they did play their part in a story that is probably all too familiar to many people, regardless of which generation they belong. It’s the silent movie everyone can clearly see that financial transactions are occurring, but no one opens their mouth to talk about them, what they mean, or about their significance. This article isn’t designed to address the money messages that I observed, made assumptions about, and carried forward into my own adult life. That’s a whole other topic entirely. What this article is designed to do is to encourage everyone to start talking about personal financial education or financial literacy (your choice, same topic), start asking questions about things that you don’t understand, start seeking the assistance and answers to issues that are even remotely applicable to your life, and to then be a source of information and inspiration for someone else that you know or who is watching your financial moves with interest (your kids perhaps).

Don’t be naïve in thinking that you NOT TELLING your kids about personal finance means that you’re not teaching them anything. Your kids are learning from you, from your friends and theirs, and from magazines, tv shows, movies, sports stars and celebrities. Have you taken a look lately and really seen what kind of financial education they are getting from you and others? The saying “it’s never too late” applies to everyone who could use a good tune-up (or even a complete overhaul) of their financial know-how. “It’s never too early” applies to the children, tweens, and teenagers in your life. Do something now to help yourself, and do something now to help someone else. Your financial future depends on it.

A Financial Literacy Emergency

We have a financial literacy crisis emerging in this country today. Surveys done by the Jump$tart Coalition for Personal Financial Literacy reveal that 12th graders consistently score extremely low on a test of practical money management questions. When it comes to adults, 75% of them don’t know how much to save for retirement. About half can answer simple questions about interest rates and inflation.

There has been a lot of talk in Washington around the turn of the century about doing bankruptcy reform to encourage consumers to behave more responsibly; however, there isn’t much talk about the responsibility of lenders. Lenders have been acting more irresponsibly by loosening lending standards. But then again, is it the lenders, or is it the government regulation? The CRA (Community Reinvestment Act) forced banks to give mortgages to people in poor communities that otherwise would not be able to buy a home. While the sentiment was good, the basic idea was seriously flawed. When these loans started to go bad, they played a key role in the Fannie Mae/Freddie Mac crisis that led to the banking crisis in 2008. Credit card companies, on the other hand, have been purposely taking advantage of financial illiteracy by encouraging credit card use, and even advertising it as sound financial planning.

Financial Education?

Consumers have not been getting a sound financial education, so they can make wise choices regarding their personal finances. Each person has just let their gut guide them along the way, and they learn as they go. The problem with this is that there are aspects of financial planning that aren’t intuitive and cannot be learned by experience without suffering a total financial failure. There are also legal aspects to financial management in the form of contractual agreements with financial institutions and insurance companies that go way over the heads of most people. So consumers are making these key financial decisions, entering into contracts when they don’t have the slightest idea what is really in them. So educating consumers in the basics of sound money management is important, and should be done in our school system before they graduate high school. This education should not be done by banks or other financial companies because of their tendencies to influence our children to become consumers of their services without knowledge of all the downside aspects. This curriculum should be developed by independent financial experts without influence from corporate sponsorship in the financial industry in any way.

The Real Solution

The solution isn’t just improved education; however, it goes much deeper than that. Money is an indicator of values. You can look at the checking account statement of any person and quantify their values by how much money goes to what. People spend money on what they value the most. Those values come out of their beliefs about how the world works. These foundational beliefs affect behavior, and behavior around money is 90% of the problem with poor financial management. Education is the other 10%. So we need to be teaching our children the proper values and priorities first before we can solve the financial literacy problem. These values can only be taught in the family, and community churches and other faith based organizations. Values are not something the government can give us, because this country’s values were given to it by the people in the form of the U.S. Constitution, and it was those Judeo-Christian values that have guided this country since its inception. Without an understanding of values based in the realities that have made this a great country, the behavior around money won’t change, and no amount of financial education will change the behavior either. So the key to the problem of financial illiteracy starts at home, were values are instilled.

Teach Kids Financial Literacy

Introduction

The need for financial literacy is rising worldwide as long term financial planning becomes an increasingly complex process where even many financial professionals find hard to grasp! With today children growing up relying on their parents’ wallets and credit cards for things they want (and often not needed), these children have apparently lost touch with money.

A Change to ‘Invisible Money’

I grew up watching my parents receiving their pay packets in a brown envelope at the end of each month. The money would go into various allocated budget and these would be under the control of my mother. She was responsible for dishing out money for daily necessities, groceries, as well as pocket monies for me and my siblings. She was able to make ends meet each month, with a bit of savings.

Today, these pay cheques have become invisible as they are credited into bank accounts with various inter-bank GIRO payments taking away part of the salaries. The advent of the credit cards has also a major impact on the spending habits of the younger generations, and credit cards have altered entire generations’ perception of money.

Teaching of Financial Literacy

In Singapore, the Ministry of Education has attempted to incorporate financial literacy into school programs such as social studies, civics, moral education at primary and secondary level. This financial literacy apparently is insufficient and has not enough depth and impact to educate the younger generations of students, and financial literacy is absence in the junior colleges and universities, as students drilled deep into their respective spheres of interest such as engineering, business administration, economics, etc.

Thus, financial education may not address the deeper issues such as behavioral patterns of today society. The hope is that it at least creates an awareness of the basics of money management.

Financial Literacy’s Importance in the New Year

What is the first thing that strikes your mind when you think about the New Year? Resolutions! Yes, almost everyone in this world would take up new resolutions for the brand new year. Interestingly, about 4 out of 5 people who make New Year’s resolutions eventually break them. For some of you, definitely personal financial budgeting will be at top of your resolutions list. Be it a little school going kid or college going kid, bachelor or a family man, everyone is imperfect when it comes to the most important financial literacy.

The million dollar question which has been asked to several people over the time is – Which aspect in life is more important than love, respect or beauty? What would be your answer to this eternal question? Well, you might have a big list to answer that question. Nonetheless, quite a lot of research and studies done by experts have only revealed that ‘Money’ is the first or predominantly, the second most desired aspect in one’s life. In average, most would agree that money is the key to overall happiness if love and respect are met. While we all can talk and debate a lot more over the importance of money, has any person thought about learning and sharing about financial literacy? When New Year is coming around the corner, sure you want to enjoy the time with family and friends but always be aware of your financial literacy and ensure to teach the importance of it to your children, grand children and younger siblings.

Below are some of the interesting points in financial literacy, especially during the New Year season.

Spread the Good Word: Firstly, it is significant that we realize the importance of saving money at every situation in life. This is the first lesson in financial literacy, so spread this piece of advice to all your friends, relatives, exclusively for kids and yes, for parents too. If they know only very little on this subject, then teach them to save a penny everyday in their own piggy-bank. Moreover, this could be the best bet of resolution for this New Year.

Time & Money are Precious:When it’s time for celebration, you will crave to throw a party at a big restaurant. Sure, you can afford that, but why not prepare some home-made dishes and celebrate New Year at home? A New Year comes and goes every year. It is important that you always be composed over spending.

Target Your Goals: Christmas and New Year is known be the celebration season of the year. There are lots of shopping and purchases to be done during this time in the year. Ensure that you follow as per budget and teach your children on the same. Not to mention, it is highly important to teach your kids on festival traditions and celebration, but at the same time they should also learn to live a content life. Both of these are valuable and certainly the New Year can be the right juncture to share these with the little ones.

Pay yourself Trick: It is a fact that you would have to pay almost all your income for some purpose time and again. In that case, before paying off all the money, have the habit of paying a lucrative amount to oneself. This is what some people say, pay yourself trick. Open up an account and pay it like a bill every paycheck. This habit could give you a great start to the New Year that’s coming ahead.

Financial Literacy – Getting Your Financial Game On!

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Financial Literacy – The Key to Greater Wealth

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Parenting 101 – National Financial Literacy Month Facts and Tips

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Financial Literacy – For Kids and Adults

Getting a bloom and medical allowance adduce provides a bulk of things. Firstly, you are assured of a assurance net in times of accidents, ailments, as able-bodied as injuries brought on the body. Secondly, through bloom and medical insurance, you can backpack out class tests, screens as able-bodied as vaccinations appropriately ensuring that you are calm and calm and in acceptable health.

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