Yesterday, Paul Farrell proved that what “bleeds leads” with his story on financial literacy education. He writes that “…even the best-of-intention (financial literacy) programs will never (yes, never) work” because as he puts it “…the human brain (cannot) retrain itself to make rational decisions about investing, finance and budgeting.”
Well, Mr. Farrell is kinda right. Retraining is a zero sum game in many instances. Once someone has dug the hole, it’s hard to climb out and over. (It’s not impossible, Mr. Farrell – that was unnecessarily dramatic, don’t you think?)
But it is true that many financial literacy efforts fail because we reach kids with financial education too darn late – after their bad financial behavior is set in stone.
Every parent knows that IF you teach your child from day “one” behavior that you want to see – like how to use their indoor voice, say please and thank you and to brush their teeth at night before bedtime – they will grow up to behave in the way you have taught them. Most of the time anyway.
But, if you wait until they are in high school to teach them life skills, they are no longer listening. Then life skills like their money behavior, now firmly molded, need to be “retrained” – and that is much harder to do.
Teaching a child life skills when they are young is the one window of opportunity we have to shape a child’s mind and behavior – and for some reason, money is the one life skill we wait too long to teach.
Today, Arnie Duncan called for EARLY financial education. (Click here to read the full article). Early as in kindergarten, when the kids are still listening to us and we have the opportunity to mold their behavior – not change – or “retrain”.
As far as Duncan is concerned, the earlier the lessons come the better:
“‘I always think you have to start young. So if this is just one course, half a semester [or] a semester senior year, [it’s] definitely late in the game,’ he said, suggesting that schools should begin incorporating basic financial instruction as early as kindergarten. He admitted, however, that the Department of Education has limited ability to implement such a move, given the broad authority that states and localities have over their own curricula.”
I don’t know if Duncan knows this is the right time to teach these skills because he has kids himself or because he has seen the data that proves early financial education makes a difference. I just know he’s right because I have seen the data – and teaching kids young about money works.
Bottom line – teach your kids about the choices they have for money, how to set goals for those choices, the difference between needs and wants and how to manage an allowance when they are young. Everything can be done in an age-appropriate way and trust me, they will get it. And if you do start young, your child will likely be a member of the Money Savvy Generation instead of a debtor that lives their life servicing that debt rather than living the American dream.