Parenting is one of the toughest things I’ve ever done. One of the frustrating parts of it is the constant nagging thought that I’m dropping the ball on some (many?) of my responsibilities. Is financial knowledge, or a proper economic education supposed to go hand in hand with teaching kids their ABCs, the benefits of using the potty, or how to throw a ball?
Plus, finances are complicated. What do you teach and when? Where should you start? For parents who don’t know much about money, or are uncertain of their own finances, this problem is magnified, and often results in no education at all.
I was super fortunate growing up – my parents were very comfortable talking about money and how it works. My dad was (and still is) a financial advisor and dinnertime conversations often included something about how money was at play in our lives. My mom was on the TV show PM Magazine with a segment called “Helen’s Wise Buys” about how to spend money carefully. I started several businesses as a kid and was able to get advice from both of them about things like pricing, cash flow, and profitability.
“But Clint,” you say, “I didn’t grow up like that. I can’t teach my kids.” That’s partially true, and partially a bad excuse. While you cannot teach what you do not know, nothing is stopping you from learning. No matter where you’re starting, there are books and resources available to you to grow your financial knowledge.
Here are some great books you can read to learn more about money:
Rich Dad Poor Dad
Total Money Makeover
Richest Man in Babylon
Think and Grow Rich
Money Doesn’t Grow on Trees
Economics in One Lesson
The Millionaire Next Door
The Automatic Millionaire
And some great websites that can help
http://www.feedthepig.org
http://www.360financialliteracy.org
http://www.mint.com
http://www.investopedia.com
http://www.khanacademy.org
http://www.nefe.org
The good news is that you don’t have to be able to describe a CDO in complete terms – but you should be able to explain how credit cards work, what happens to a check after you give it to someone, and how borrowing from a bank works. If you know you don’t know something, learn about it. The more you know, the more you can help your kids avoid dangerous mistakes and make smart financial decisions.
Once you have your own financial education in order, it’ll be that much easier to teach your kids. Take this step for yourself, for your family, and for your kids.