Due to the pandemic, many of us are facing the reality that our children are not going to be headed back to school in the Fall and instead will most likely continue with virtual learning. There are many creative and engaging ways to teach life lessons outside of the classroom, even if you are not a certified teacher! One area that is important to talk about with children at any age is finances.
The sad truth is that most children are growing up without any financial education whatsoever, whether at home or at school. Since 2016, not one U.S. state has added personal finance to the K-12 standards.(1)
This lack of financial basics is creating long-term negative effects. For example, nearly one fourth of millennials are spending more money than they earn and 67% of Gen Yers have less than 3 months’ worth of savings in emergency funds.(2)
Studies show that children benefit from learning how money works, beginning at a very young age. These are just a few of the benefits that come from financial literacy:
While many parents understand that there is value in teaching their kids about money, they often are not sure where or how to start. These are three ways to think about teaching your children about money:
As women business owners, teaching financial literacy to our own families, especially to our daughters, is very important. Studies consistently find that women have lower financial literacy levels than men, even after accounting for marital status, education and income. This gender gap in financial literacy is observed throughout women’s lives.(5) However, as parents we can stop this trend. Parents are likely to pass down good and bad financial habits to their kids. Parents who discuss financial topics with their kids at least once a week are significantly more likely to have kids who say they are smart about money (64% vs. 41%).(6)