Financial struggles and poor money decisions are the kind of thing you might not even wish upon your worst enemy. If you’ve been through the money wringer yourself, you don’t want anyone else to experience similar suffering.
That’s even more true when applied to your offspring. As a parent, you want your kids to enter adulthood with more financial sense than you had back when it seemed like that getting and using that stack of credit cards offered to you as a college freshman was a good idea.
Unfortunately, it seems like we’re doing a lousy job of teaching our children the basics when it comes to money. Research shows a shocking lack of financial savvy among high schoolers in the U.S. and those financial illiteracy rates are encouraging many worried parties to take action.
That’s why the Federal Reserve Bank of Chicago has materials to help teach kids about money. It’s also the reason why a legislator in my home state of Kansas is pushing for a financial education curriculum that would stretch from nap time at kindergarten all the way through the senior prom. Jump $tart, which provides educational materials on personal finance topics is another example of how some well-meaning adults are trying to protect future generations from Chapter Seven filings and bad home buying decisions. It doesn’t take long to find a series of websites chock-full of instructional materials designed to combat financial illiteracy.
It sounds good. We want kids to grow up with a working knowledge of how to manage their finances. We love the idea of having everyone understand basic economic concepts. Considering how poorly we seem to be doing on those fronts, a little educational assistance sounds like a great idea.
As with so many seemingly great ideas, however, there appears to be a problem. Financial education, no matter how well-intended, doesn’t seem to work.
That’s not a problem with Jump $tarts resources or the quality of instruction provided by teachers. Kids just don’t seem to soak up financial wisdom in a classroom. Even when they do learn about core principles, that knowledge doesn’t seem to translate into smart action.
Professor Lauren Willis blames the capitalistic desire to sell for undermining financial education. She claims that lessons in the basics are drowned out by the marketing efforts of those who don’t necessarily have people’s long term financial interests at heart. She also sees a dark side to financial education–people who should still be relying on expert advice make the mistake of believing they can capably manage their resources effectively when they really can’t.
Others have noticed that the consumer education classes they took in high school just didn’t “click” and that they weren’t able to get a grip on their personal finances until they took a few courses out in the real world’s school of hard knocks.
The most compelling argument against the efficacy of financial education may be the idea that we will inevitably learn our money management habits by studying the examples of our parents. The lessons we might study in our junior year of high school just won’t be strong enough to trump eighteen years of watching how mom and dad deal with the bills.
The idea of teaching kids about how to handle money is noble and there’s probably a strong case to be made for introducing basic concepts and vocabulary to all students. However, we shouldn’t expect these measures to produce any real changes in behavior.
If we want our kids to do a better job with money, we need to start doing a better job with money. The kids are watching. Set a good example.
This is a guest post by Carson Brackney, writer for Personal Finance Analyst. Personal Finance Analyst is an online community of bloggers dedicated to taking the mystery out of money and helping you to live a happier, more successful life with the money you have.