Do you remember Personal Finance 101? I don’t. Because it didn’t exist.
It doesn’t exist today in the majority of schools.
A astounding 99% of American adults agree finance should be taught in the classroom, and you still won’t find it in… about 99% of schools (I made up that second figure, but I dare you to find a public school in your town that teaches a real finance class).
Why Isn’t Finance Taught in School?
Financial journalist, Dan Kadlec, pointed out a few reasons why finance isn’t taught in schools 1, including:
- Only one in five teachers feels qualified to lead a personal finance class
- We don’t have enough instructors to teach finance classes (see reason #1)
- Personal finance isn’t part of the ACT or SAT – if it’s not tested it’s not taught 2
- Education is up to the states, not the feds, and each state has different ideas
- There isn’t much agreement as to which finance concepts would be taught
It’s hard to pinpoint the real reason personal finance isn’t taught in schools, but the fact remains: financial education for children is the responsibility of the parents.
This is another problem, because if most teachers don’t feel qualified to teach finance classes, how do you think parents feel?
Most Parents Need Financial Help
According to a 2012 study, 80% of U.S. adults say they could use help with financial questions. 3
And it seems to be getting worse.
Just talk to your neighbor, a colleague, or the first person you see on the street, and see how they’re doing with their finances. Or just look at how much the average person has in savings:
If we’re responsible for teaching financial skills to our children, we need to get our finances together. It takes some self-education, but it pays off in the end (pun intended).
When parents are bad with money, the cure-all is typically: “go to college and get good grades so you can get a good job,” but this alone doesn’t solve the problem.
There’s an assumption that people who earn a lot of money have a lot of money. Take doctors, for example: the average person would assume most doctors are financially well off, but that’s not always the case. According to doctor and writer, Sanj Katyal, MD, most doctors have no clue what they’re doing with their money. 4
It’s common for someone who isn’t doing well financially (and didn’t go to college) to think the answer for their children is simply to go to college.
It goes something like this, “Go to college like I never did so you’ll be successful.”
It seems legitimate, and I’m sure the intentions are outstanding, but that doesn’t mean it’s the right answer.
There is nothing wrong with college, but we have to prepare our kids to handle their finances before they leave for college. Unless they’re going for a finance degree, college won’t teach your children much about money either. They could end up with a high income and no clue how to handle it (just look at the typical NFL or NBA player… or doctor).
The issues stems from the fact that we don’t talk about money.
The Taboo Topic of Money
As children, we’re taught to never discuss our personal finances. Money is a private issue — a taboo topic. You don’t discuss your income, your investments, or your savings.
Never. Talk. About. Money.
Sadly, a common view.
This is why kids know absolutely nothing about their parents’ financial situation. This leads to adults who know nothing about finances in general. And that’s where most people stop.
Honestly, that’s where most people are right now. They’re struggling to make it, afraid to ask for help, because they don’t want anyone else to see their financial situation.
So many couples have asked for my help, but when it came time to look at their finances, they backed out. It can be embarrassing. I’ve been there: in thousands of dollars of debt, afraid for anyone to see my finances on paper. I know it’s tough. But you can’t just do nothing. You have to learn how to handle money for your children’s sake if not for yours.
Financial Literacy in the Next Generation
You may be a parent who feels inadequate to teach your kids about money, but you’re fully capable. You may come from a history of financial mistakes, both personally and generationally, but that can stop now.
Anyone is capable of becoming financial literate. We can equip our children to win with money after we learn how to win with money.
It’s easy to teach financial concepts to kids. And it’s always better for them to learn before they’re buried in $100k of debt. If they start right, they won’t have anything to climb out of.
But how do you teach your kids about money if you don’t know what you’re doing?
You can start learning what you’re doing today. The basics of good finances is easy to learn. Things like not spending more than you earn, investing simply yet wisely, and being prepared for hard times are common sense. But they aren’t commonly taught.
I’ll be publishing a complete book in the fall of 2020 on exactly how to teach your kids about finances. For now, keep reading for some resources you can use today.
How You Can Be Your Family’s Change
Cut off the poor mindset that runs in your family.
Break the generational chains of debt.
Stop the generational addictions that kept your family poor.
Whatever it is. It doesn’t have to continue any longer. You can be the change you want to see in your family tree. Just like any other bad habit, poor financial skills can be fixed.
The generational curse of poor finances can be broken.
You can change everything.
Start by learning the basics of good money management. This will be part of our Parent Finance 101 video in the course coming soon, but you can start today by just reading one book on finances.
Aren’t much of a reader? I suggest you start. It’s what separates the successful from the unsuccessful. 5 But the good news is, you don’t have to sit down and read a book if that’s not your forte.
We’re in the 21st century now. Get an audiobook and listen to it on the way to work. You can get an Audible subscription for about $15/month and intake more books this year than you have since you were born.
Or you could just go to your local library for free. Money isn’t even an excuse to suck at money. You can educate yourself for free. Why not start today?
Continue Reading: 5 Ways to Teach Your Kids About Money if You Feel Unqualified
Further Book Reading
These are some great options to start your financial journey:
- The Total Money Makeover by Dave Ramsey
- The Wealthy Barber by David Chilton
- Managing Your Finances God’s Way by Johnathan Mun
Great books to teach your kids about money (until mine comes out 😉 ) :
- Teach Your Child to Fish by Holly D. Reid
- Make Your Kid a Money Genius by Beth Kobliner
- Money Monster or Money Master? by Norma LaFonte
- Moneybags: A Guide to Teach Your Kids About Money by Wendy Gillespie
Editor’s Note: This article was originally published on November 5, 2018. It was actually the very first Freedom Sprout article! Since then, some things have changed, so the article has been updated with more and new information for your reading pleasure.
- Kadlec, D. (2013, October 13). Why We Want—But Can’t Have—Personal Finance in Schools. Time.
- Some colleges are actually moving away from these standardized tests and turning to tests more specific to their school.
- Harris Interactive Inc. (2012). 2012 Consumer Financial Literary Survey
- Katyal, S. (2015, January 31). Most doctors are financially illiterate. Kevin MD.
- Merle, A. (2016, April 14). The Reading Habits of Ultra-Successful People. HuffPost.