Do you know anyone who’s struggling with managing their personal finances?
You probably do. One in 4 adults (25%) do not pay their bills on time, and almost 1 in 3 millennials (32%) feel not at all or not very knowledgeable about how their credit score is determined, according to a survey from the National Foundation for Credit Counseling.
Clearly, people need to know more about personal finance. The good news is that it’s easy to learn — even at young ages. In fact, the more kids learn about money, the better they manage it when they become adults. Indeed, high school students who take personal finance classes have better than average credit scores and lower debt delinquency rates on credit accounts as young adults, according to a report from the Financial Industry Regulatory Authority.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Unfortunately, only 17 states require that high schools teach personal finance, says the Council for Economic Education. As a result, the average high school graduate lacks basic personal finance skills, causing many to struggle throughout their lives with budgeting, saving, borrowing, spending and investing wisely.
Because schoolteachers aren’t providing this education to our kids, you must. That might sound a bit intimidating, but teaching personal finance to youths — even kids as young as 3 — doesn’t have to be daunting. Here are some ways you can improve the financial know-how of the young people in your life:
Start now
Begin casual conversations about money. There are lots of opportunities.
- When preparing your tax return, talk about the role of taxes in society.
- During the holidays, talk about giving to charity and those in need.
- Trips to the grocery store or mall can lead to natural chats about spending, credit cards, delayed gratification and the need to make choices.
The most important thing to do is to just start. It’s never too early to help children become financially savvy.
Read and listen
There are lots of books, podcasts, blog posts, TV and radio shows, and even apps that provide low- or no-cost financial information. For example, I’ve dedicated my career to teaching consumers about personal finance, through my weekly radio show and online education center. And last year we published our first children’s book on money for 4- to 8-year-olds, called The Squirrel Manifesto, which helps you have healthy conversations with children about money and educate them on the four fundamental money principles: tax a little, spend a little, save a little, give a little.
Ask for help
While it can feel uncomfortable to talk candidly about money, having a conversation with friends, family or a financial adviser can be incredibly helpful. When someone comments or asks about financial issues, take the conversation seriously, and invite a financial professional to help explain complex topics.
Educate children early
It’s not enough that you educate yourself about personal finance. You must also help children form healthy relationships with money.
By starting to teach people when they are young, we can help the next generation enjoy a healthier relationship with money throughout their lives.
-
Stock Market Today: Have We Seen the Bottom for Stocks?Solid first-quarter earnings suggest fundamentals remain solid, and recent price action is encouraging too.
-
Is the GOP Secretly Planning to Raise Taxes on the Rich?Tax Reform As high-stakes tax reform talks resume on Capitol Hill, questions are swirling about what Republicans and President Trump will do.
-
Social Security Is Taxable, But There Are WorkaroundsIf you're strategic about your retirement account withdrawals, you can potentially minimize the taxes you'll pay on your Social Security benefits.
-
Serious Medical Diagnosis? Four Financial Steps to TakeA serious medical diagnosis calls for updates of your financial, health care and estate plans as well as open conversations with those who'll fulfill your wishes.
-
To Stay on Track for Retirement, Consider Doing ThisWriting down your retirement and income plan in an investment policy statement can help you resist letting a bear market upend your retirement.
-
How to Make Changing Interest Rates Work for Your RetirementHigher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
-
Within Five Years of Retirement? Five Things to Do NowIf you're retiring in the next five years, your to-do list should contain some financial planning and, according to current retirees, a few life goals, too.
-
The Home Stretch: Seven Essential Steps for Pre-RetireesThe decade before retirement is the home stretch in the race to quit work — but there are crucial financial decisions to make before you reach the finish line.
-
Three Options for Retirees With Concentrated Stock PositionsIf a significant chunk of your portfolio is tied up in a single stock, you'll need to make sure it won't disrupt your retirement and legacy goals. Here's how.
-
Four Reasons It May Be Time to Shop for New InsuranceYou may be unhappy with your insurance for any number of reasons, so once you've decided to shop, what is appropriate (or inappropriate) timing?
