The new school year is well underway by now, which means students all over the country are finally back in the classroom after a long summer break. While these kids are no doubt getting an adequate dose of the three R’s in their daily curriculum, one subject that never receives enough attention—or any at all—is personal finance.
Personal financial literacy, commonly defined as knowledge of how money works on an individual or family level, is a vital skill for people in all walks of life. The lack of early and frequent exposure to fundamental concepts like balancing a checkbook or calculating interest rates results in high school and even college graduates that are unprepared to manage money when they enter adulthood. This in turn can lead to such problems as poor financial decision-making, excessive debt, bad credit ratings, and inadequate retirement savings.
To ensure your children receive the skills needed to successfully navigate the world of personal finance, it is imperative that you take it upon yourself to teach them the basics. Here’s how to do it:
This list represents just the beginning when it comes to instructing your child in the principles of personal finance; additional skills and more complex concepts may be introduced as necessity or circumstances dictate. The important point is that you make an effort to teach these things in the first place instead of leaving this vital task to an already overburdened school system.