A child is like a sponge. Well, only in the sense that they are constantly taking in and storing something, and that something is information, according to Age of Montessori. They’re getting it from all around them: at home, at school, from their friends, their teachers, and especially from their parents.
A child’s brain doesn’t always act like a sponge though – it only acts differently from an adult’s brain until they’re about six years old, and then starts its transition from either subconsciously or consciously absorbing information to a more mature analysis of information.
Because of this, and because the majority of a child’s time is split between preschool/school, and home, education in both places is crucial. If you haven’t started financial education for your child at home yet, there’s no better time to start than today.
We live in a time where financial education is more critical than ever. According to Student Loan Hero, student loan debts are at a record high, with the Class of 2017 graduates racking up 6 percent more debt than the previous year. They go on to mention that, collectively, Americans owe over $1.48 trillion in student loan debt, spread out over 44 million borrowers. They’re called scary statistics for a reason, and it’s something that parents should be actively raising their children to stop. With early financial education, children won’t grow up with the massive weight of student debt on their shoulders.
Even before college, the statistics aren’t promising. According to youth.gov, a survey of 15-year-olds in the United States found that 18 percent of respondents did not learn fundamental financial skills that are often applied in everyday situations, like comparison shopping, understanding an invoice, and building a simple budget. Learning those crucial life skills starts in the home, and carries forward into school. It doesn’t necessarily mean your child has to be a certain age before they can start learning, either.
In fact, in a lot of cases, the earlier the better. Children who take just basic financial classes are far ahead of children who simply absorb what they see around them, especially if what they’re absorbing are bad financial habits, which is often the case. The kids who took those classes have shown that they take what they’ve learned and apply it throughout their lives, having better credit scores and lower debt, according to FINRA. That’s an easy solution, and something to be proud of.
It’s also something that be can taught either in the school or at home, which leaves a lot of options open to every style of parenting. No matter what you decide, simply know that the time is short. Children are learning more and more each day, and that includes bad and good financial habits – and the window to develop good ones gets smaller each day.
To help you make the best decision for your family, here’s a brief look at the pros and cons for teaching your children finances in home, as well as in allowing others to influence their financial practices, for better or for worse, at school:
We’ll start with the pros of teaching at home. One of the greatest boons to this is that children observe and learn from those that they know and trust best, with their parents will be the most influential people in their lives in that regard – especially mom. When the kids are young, they’re with mom (or whoever takes care of them throughout the day) all the time, so they have a wonderful opportunity to absorb the hands-on skills that their parent employs in things like budgeting, grocery shopping, purchasing items, and even in doing taxes. This also means that there’s an added responsibility on the parents, to be always sure that they’re doing the best they can to model the best financial decisions. Thankfully, this is best shown through day-to-day, faithful behaviors that show their children how to save and how to spend well, alongside giving their children the space and opportunity to have their own, real-life financial experiences.
Some of the drawbacks to teaching finances at home, however, are that teaching good, consistent lessons is a lot of work that will take a lot of time from the day. It’s much easier for parents to just do the tasks themselves, instead of walking their children though a task (oftentimes more than once). For car loans or taxes, it can be quite a hassle hauling everybody to the car dealership or the insurance office, or explaining even the most basic ideas behind simple taxes. It takes work, and parents must be accountable while modeling strong financial responsibility, and some are not ready to do so.
Many parents are afraid of their children picking up bad financial habits, so they avoid teaching them, to ensure that their children don’t get the wrong messages. Some children don’t have guardians who are active in their lives, which leaves home teaching as a moot point. Finally, some parents simply don’t know how to speak to their children about money, and become even more paralyzed after each failed attempt.
What about teaching finances in school, then? The pros are good ones, as teachers can take the opportunity to give their students hands-on life skills, that will be directly applicable to their lives in school and after college. Because there is a large number of parents who are making bad financial decisions themselves, teachers can be proactive and more objective while teaching them good habits to counteract the bad ones. Teachers in schools have more resources to teach, including time (a precious resource) in the classroom, and classroom materials, and it’s part of their job to schedule time to train their students up to be good stewards of their money.
The cons, however, are something to think about. Sometimes, teachers either feel, or are actually, unqualified to be teaching on finances, and schools may fail to bring in help to supplement or take over. Other times, schools may not be able to find the time or a spot for the class, or they start the class right before they shuttle the kids off to university – which is too late to be learning this kind of information.
Another simple truth is that the financial class taught at the school might just be boring. The teacher might have been dumped into the class, or treats it like a college lecture, instead of a simple class teaching a life skill. Teachers might find it difficult, too, to get students to interact comfortably in the class if finances aren’t something that’s talked about in the home.
With those facts in mind, you can weigh the pros and cons accurately. The best option, in many cases, is not a matter of saying ‘yes’ to one, and ‘no’ to the other. It’s in saying ‘yes’ to both! There is an order to it, however, and you can think about it like building a foundation. The work begins at home, as parents are the main, and oftentimes only, financial role models in their child’s life. But these principles that their parents are instilling in them should be built upon at school, where they’re learning supplementary and quality financial skills, to complement what they’re learning about at home.
Financial literacy starts with each individual, parent or teacher, committing themselves to being a faithful, strong role model for children who look to them for guidance. All it takes is the resolve to take the first step forward, and to allow a child to follow in your footsteps.