What Do You Know About Money? A Financial Assessment for the Everyday Parent
January 28, 2015
How much do you know about money?
In order to teach your children about money, you yourself need to have a solid grasp of your finances – or at least financial topics. You can’t teach what you don’t know—and I suspect that each of us has holes in our financial knowledge, areas where we wish we were more proficient. The great thing is that the resources for filling those holes are endless.
First, take a test to assess your level of financial literacy. Even if you think you know where the gaps in your knowledge are, taking just one financial assessment (of the many now available to you online) never hurts to form a better understanding of your current level of understanding. You can find easy and free tests online. The Financial Industry Regulatory Authority (FINRA) offers a great option. Alternatively, try out the test offered by the Council for Economic Education.
Once you’ve figured out where you’re lacking, find resources that are specific to your needs. The all-stars of personal finance books provide time-tested tools for getting smarter about finances. Here are some I’ve found particularly helpful.
If you find yourself in need of a practical and holistic guide to managing your money, try Rich Dad, Poor Dad by Robert T. Kiyosaki. If you have issues with debt or financial instability in your current lifestyle, read The Total Money Makeover by Dave Ramsey or The Money Code by Joe John Duran.
Should you be looking for ways to grow your wealth (and who isn’t?), The Millionaire Next Door by Thomas Stanley and William Danko, Think and Grow Rich by Napoleon Hill, and The Richest Man in Babylon by George S. Clason are excellent options. A good follow-up read to help you plan a healthy financial future is Wealthy by Design by Kimberly Foss. Finally, Erin Botsford wrote a great guide on retirement savings, The Big Retirement Risk.
If you want to brush up on your investment skills, I like The Intelligent Investor by Benjamin Graham or One Up on Wall Street by Peter Lynch. If you’re looking for an overall economics lesson, the well-named Economics in One Lesson by Henry Hazlitt is a great read.
If you prefer a more structured approach, you can take an online course via a university or online institution. For example, Khan Academy has an entire offering of financial management courses covering topics like taxes, housing, and much more. If you prefer to learn in-person, check with a local community college; it probably offers classes on introductory accounting. You can always take a money-smart friend to lunch to learn from them, or ask your accountant, banker, or lawyer to explain a key issue to you. Remember that subject-matter experts are all around you—take advantage of those who want to help you increase your financial intelligence.
Any way you choose to do it, the goal is to make sure you are properly prepared to talk about financial management to your child. You’d never dream of trying to teach your child how to speak Mandarin without speaking it yourself, right? The same goes for managing money. Plus, you get the added bonus of a great excuse to fine-tune your financial skills—making you a better teacher and helping you achieve your own financial goals simultaneously.