**this is a re-post and credit to Heather Locus** I share the EXACT same view on this which is part of my emphasis and reason for "EMPOWERING WOMEN * INSPIRING CHANGE"
Credit cards, college debt, a sense of entitlement… These issues are considered to be large contributors in why Generation Y has become our least financially fit generation to date. An interview in the Journal of Financial Planning with Elisabeth Donati, Founder and Executive of Creative Wealth International, offered the following insights about younger generations and their growing money troubles.
Young adults under 25 are now the fastest growing age group filing bankruptcies. Less than 10% of high school graduates are taking any courses on personal finance. College suicides are thought to be on the rise in large part due to financial struggles. As parents or role models of younger generations, it is our responsibility to lead by example in our own financial lives. It is also important that we take steps to educate and communicate with our children to set them up for their own successful financial futures. This initiative yields several questions.
When? When do we begin talking to our kids about money? Experiences have shown that in general, the earlier the better. An individual’s emotions and subconscious outlook on wealth are formed within the first twelve years of a person’s life. Feelings of scarcity or abundance and thriftiness or generosity are generally established at a young age and will continue to exist in the underlying foundation of a person’s attitude towards money regardless of future life changing events.
What? What information do we share with our children? This question is not as difficult when dealing with younger kids, but becomes more complicated as they grow older. With younger children, it may be sufficient to teach them the value of a dollar, emphasize the importance of saving, and maybe share the significance of monetary gifting.
These values should continue to be reinforced as children grow older, but with young adults the question arises as to how much should be shared about the family’s financial situation. Many people these days are more comfortable talking with their children about the birds and the bees than they are discussing personal financial issues. While each family’s answer to the question of what information should be shared will be different, the important point is to make sure that you do not avoid addressing real-world, adult financial topics. College planning may be a stimulus for discussion. Negotiating for a child’s first real job or first home purchase could spark conversation. Regardless, it is imperative that you share your experiences and at least lay the groundwork for serious discussions about your family’s wealth management plan.
How? How do you effectively instill in your children appropriate values and education about money? My best advice: be proactive and be creative. Do not wait for your children to make mistakes before addressing financial concerns. If you do not feel qualified to discuss an issue, work with your financial advisor to plan the best approach or message. Creatively teach the concept of budgeting to your children at an early age. If they have $3 of spending money left at the water park they can either have a hot dog or another ride on the slide – but they cannot afford both. You can help your newly driving children build good credit by having them open a credit card solely for gas purchases (and then of course ensuring that they are paying it off in full each month). For older children who move back home, you could charge “rent” to help them adjust to paying monthly expenses, put that money into an appreciating savings account and then allow them to use that money towards their first month’s payment when they are ready to move out on their own.
Ultimately there are no definitive right or wrong answers when it comes to teaching our younger generations about money. Without a doubt, our biggest mistake would be to disregard Generation Y’s growing financial problems. When just setting a good example is not enough, it is important that we take the time and energy to educate and communicate with the kids in our life to help foster healthier financial futures for everyone.
Bloggers note: If you click on the title it will take you to "Kids' Money" . org which provides various links, info and more suggestions. I do not maintain that site and it's only a suggestion. I also found "Ways to Teach Kids About Money" and "Money Instructor"(which had some cool printables & games), "Top Things to Know" -from CNN and "Getting Started" - From Marketwatch Feel free to Google and more suggestions appreciated. Feel free to post them here!
****Empowering Women, Inspiring Change****
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