Money might be the last taboo topic.
In a society that runs on capitalism, we seem to have a harder time talking to our children about personal finance than we do about sex, race or even death. Maybe it’s because so many of us are so bad at financial matters ourselves.
According to a 2017 GOBankingRates survey, 57 percent of Americans have less than $1,000 in their savings accounts. Meanwhile, the Federal Reserve says the average American household carries $137,063 in debt while the U.S. Census Bureau reports a median household income of $59,039.
You don’t have to be a licensed accountant to see what those numbers add up to.
One reason we’re so bad at personal finance is that many of us were not taught about it when we were young.
So why aren’t we doing more to teach the next generations about financial literacy?
“In the state of Florida, it’s up for debate right now,” said Robert Brazofsky, executive director of the Department of Social Sciences for Miami-Dade County Public Schools. “The state legislature is looking at different alternatives for financial literacy education.”
As it stands now, the only requirement is that personal finance be part of the 12th-grade economics course, a half-credit course that covers a wide variety of topics, including supply and demand and economic trends.
“So it’s not even a stand-alone financial literacy course,” Brazofsky said. “Obviously there is a need for students to have more comprehensive approach to financial education and to be financially literate. By the time they get to 12th grade, some of these kids already have credit cards. So they may have already made mistakes. “
About three years ago, Brazofksy led an effort to include more financial literacy education for Miami-Dade students. Teachers from kindergarten through 12th grade got together and created 195 lessons spanning the grade levels, with 15 lessons per grade.
The lessons are available online for parents and students to review on their own as well, and that’s a good thing, because despite their hard work and best efforts, Brazofsky and his teachers had to shoehorn the entire financial literacy program into the last three weeks of the school year. By then, testing is complete and the rest of the course requirements for a given grade level have been taught.
Three weeks a year of financial education isn’t much, so a great deal still rests on parents’ shoulders. And that can be hard. Most adults learn to manage their own finances through trial and error.
Brazofsky said many of his teachers feel awkward presuming to teach personal finance to children when their own finances might not be in order.
Parents struggling with debt and living beyond their means also might be uncomfortable talking money with the kids who rely on them.
Gregg Murset, CEO of BusyKid, has one piece of advice for those parents: “Get over it.”
A certified financial planner with six children of his own, even Murset struggled at first to teach his offspring money matters.
“The overall goal is you want them to leave your house one day and never come back except to visit once in a while, and so if we want that to happen, these are the things we have to teach them,” Murset said. “It’s a life skill that we use more than any other life skill. You make so many financial decisions everyday, and the fact that we don’t teach this, for the most part, in school really drives me bonkers.”
Murset firmly believes children learn best by doing. That why he developed his BusyKid app, which allows children to work for and use money the same way adults do now, by swiping a card.
“Gone are the days of the old school piggy bank on the dresser. I think that ship has sailed, so we’ve got to change,” Murset said. “We’re not taking out a wad of cash anymore, so it’s hard to teach them about something we don’t actually see.”
BusyKid allows parents to assign chores, give each chore a value, create a chore chart to keep track of what’s been assigned and completed, and pay the hardworking kids their allowance. Parents can choose gift cards or a prepaid card. Parents also get to see how their kids are spending their money and, to some extent, control it.
“It gives them an ecosystem to do all that in,” Murset of the app.“You’re not going to let them go too far off the rails. So, later, when they get to the big decisions — such as ‘Should I buy this car or get this student loan?’ — they’re prepared.”
Children can divvy up their “income” just like an adult would. They can put some into savings, designate some for spending, and even make donations to charities. Future financial pros can even get a taste of investing by buying stocks, all within the safety of the app and under the watchful eyes of their parents, who get alerts asking for approval for everything their child does.
Teaching children to work hard and to manage money are the two pillars of Murset’s teaching philosophy, but the magic, he said, is when they learn how work and money go together.
“I think there’s some great places to do this. No. 1 is at the checkout stand,” Murset said. “You’re out with your kid in tow. You’re standing there anyway wasting your time waiting to checkout. This is a great time to teach about the difference between credit and debit cards.”
He said to let them actually swipe the cards and push the buttons. Then hand them the receipt and point out the various line items, like sales tax.
“Another great step: You get an email that the electric bill is due or the auto is due. Call your child over and say, ‘I have a bill I have to pay,’ and explain it. Pull up bill pay or whatever it is you do to pay that bill and let them do it. Let them push the buttons. Let then tap in $695 for the electric bill in the summer,” said Murset, who lives in Arizona.
It’s moments like these, he said, when the magic happens and children connect how long and hard they have to work to make money with how much things in life actually cost.
If you’re diligent, you end up with a child who is more interested in how much they can save rather than what they can spend it on.
“This is what happened with my now 17-year-old. I’ve exposed her to so much of this stuff — how much things cost, stuff like that. So now she gets after me for stuff like, ‘Why are we remodeling the bathroom? That’s a waste of money.’ Why not ask questions like that? That’s the kind of thing that I want to happen. That’s the kind of lightbulb. Being more transparent is better, even if it’s a little embarrassing, and maybe that’s what you need, too.”
After all, if in the process of teaching our children good financial skills, we learn (and practice) a few ourselves, all the better.
