NDSU Extension Service - Mercer County

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Why Parents Don't Talk about Money, And Why it Hurts Their Kids

personal finance, economic knowledge, money, money skills

Submitted by Dena Kemmet, Extension Agent/Family and Consumer Sciences

Teens may be discussing the economy and personal finance more since the Great Recession, but that doesn’t mean they know what they are talking about.

A new report from the Department of Education shows no improvement in high school seniors’ economic knowledge from six years ago, despite living through the Great Recession and feeling its lingering effects. What's more, less than half of the students have a solid understanding of economics.

“People don’t understand the basics about money,” says Vince Shorb, CEO of National Financial Educators Council. “In the U.S. it has to do with parents not talking about money, not bringing them into activities that involve money. At grocery stores you see children begging and throwing tantrums over wanting something and parents just cave instead of making it a teachable moment.”

The Education Department report, which tests around 11,000 12th-grade students at public and private schools, did have some good news: Students are increasingly getting some sort of economics teaching, and they are talking about the topic more.

While it’s clear financial literacy needs to be improved, there’s debate on who should be teaching the lessons: teachers, parents, or a combination of both.

What we have lived through over the past several years with the economic meltdown and all of its ramifications is that we as a nation are woefully financially illiterate. One problem is that many of our parents will admit they never received financial training themselves.

Money issues are often overlooked by parents because it’s an emotional issue that can be uncomfortable to talk about. When parents are in financial troubles and aren’t good with managing their own finances, they are hesitant to talk about it with children so children aren’t taught how to manage money, and it becomes a vicious cycle. Children are getting money lessons—just not from an ideal teacher: the media.

Ways for Parents to Teach Children Money Skills

Get Three Piggy Banks: Designate a spend, save, donate bank to teach children how to form a budget and create a savings plan.

Visit the Bank as a Family: Make sure kids watch you deposit money into a bank account in addition to making withdrawals from the ATM.

Reward Savings Goals: To encourage savings, pledge to match whatever savings they put aside for a new purchase.

Children are exposed to consumption of money 24-7 on TV, magazines, mobile devices and billboards, they are constantly being engaged to spend money, but they don’t know that they have to earn it as well.

How to approach money discussions and lessons should depend on a child’s age and maturity level, but experts say the earlier the better.

Every parent wants the best for their kid, so teach them about money because it impacts their wellbeing, emotional health and overall health. It allows them to live out their dream and be successful, it’s the biggest important lesson parents can pass on to their kids.

Source: www.foxbusiness.com/archive/author/kathryn-buschman-vasel

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