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.