Money should not be a taboo topic within your family. On the contrary, it is probably wise if you have an open communication with your loved ones, including your children.
When we were younger, many of us often received the advice “If you study hard, attend college and get a job, you should get a decent life”.
Yet, there is usually more than just earning enough to meet ends meet. It is a good start if you begin your financial planning with a budget plan. However, you may soon find out that sustaining a long-term budget with financial goals is another huge project altogether.
Additionally, we tend to learn from what we are exposed to. Businesses are leveraging this opportunity with fanciful financial products. Over time, the responsibility of financial well-being is on us as businesses place more emphasis on selling over educating.
“..consumers are sometimes only as literate as the products the financial-services industry chooses to sell them.” (Getting It Right On The Money, Apr 8, 2008)
So how do we decide based on our individual circumstance? In this case, we need both financial knowledge and good habits to make good decisions and leverage the financial products. If financial literacy is important, why is our financial literacy education low on our priority list?
Fear of Money Topics At Home
Some parents may worry that a full disclosure of the family’s financial situation can add more stress to their children’s lives. This is especially true for families who are struggling with poor financial planning.
Parents in these families may not want their children to know the truth and bear the burden. Others would argue that children should have their “childhood” and financial literacy forces their children out of this precious phrase.
According to Fidelity Investments’ Family and Finance Study, 70% of the surveyed parents claimed that they “had detailed conversation” while more than half of their children reported that they did not receive it. (The Last Taboo: Your Parents Still Won’t Talk About Their Money With You, Jan 31, 2017)
Additionally, some parents may feel that they are not well equipped with the knowledge of handling money. This is unfortunate as most parents do know some form of financial literacy.
Lessons from failures can be just as important as successful methods towards building a financially sustainable household. Parents can share their tried-and-tested strategies as part of the learning process for their children.
Lack of Demand for Financial Literacy Courses
On the other hand, schools are struggling to teach financial literacy across the world. In this region, exam-based subjects are the usual priorities over critical life skills such as financial literacy. Furthermore, financial literacy education is often bundled with risky stock-investing classes or insurance pitches and this makes many educators frustrated.
The effects of such classes are often negligible as the importance of money habits is lost to the mentality of getting rich quickly. This deters sceptic educators from supplying more funds for financial literacy programmes in school.
Start Young, Start Right
Personal finance is nothing new. Global events such as the U.S subprime mortgage crisis in 2008 to recession survival in Asia have taught us to be more careful about how we budget our finances. Yet, we tend to neglect the topics of finance knowledge and money habits over time.
As parents, we cannot prevent our children from talking to their peers or picking up online knowledge about their personal finance. Despite this, we can guide them to research for accurate finance knowledge and understand the options they have.
It is recommended to start this research from young so that we can help our children create a set of financial values that they can follow throughout their lives.
This is especially relevant for children because good habits can enable them to make reasonable decisions over their lifetime.
Good money habits can also contribute towards a good game plan for them to succeed financially in life.
We would want our children to have a brighter financial prospect and a secured future. Moreover, it would better if our children can grow up to become financially astute adults. Therefore, we should include financial literacy as part of our daily lesson plans for our children as soon as possible.
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