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How To Teach Your Child About Money

January 14, 2016

It is a depressing fact that many adults in North America know very little about money, debt, and how the economy works. There are an awful amount of people that struggle to get by from paycheck to paycheck while racking up credit card debt. Many of these people grew up in households where their parents did exactly the same thing. That is where they learned their bad financial habits and they will probably pass that bad information on to their kids which keeps the cycle of financial illiteracy going.

The school system needs to take some of the blame, since they spend a lot of time teaching kids about stuff that they find to be useless and will purge from their minds immediately after they take the final test. They think “yeah I don’t have to worry about a 16th century king anymore” and hit the erase button in their minds. Why not take some of the time dedicated to learning about stuff that doesn’t directly impact their lives and use it to teach them about the day to day finances that are involved in running a household? This is something that needs to be repeated every year of school so that they do not forget things like debt is bad and interest on your credit card can kill you.

There should be a mandatory class called “Personal Finance” that must be taken by every child from grade one to twelve. Yes it would get a bit repetitive but that would be the point. If you heard about saving, and investing every year you might actually start living with those ideas in mind. You might actually understand that if you pay only the minimum payments on your credit cards each month, it will take years to pay off the balance. Things like that would be ingrained into your brain and you would be conscious of debt and financing and use that information in all your decision making.

Here is a video that talks about ways you can start educating your children on how to start saving and investing.