For a personal financial education, do children have anyone but their parents to teach them? And what are they learning? Parents are the people who taught most children their personal finance skills as outlined by a survey. But the same survey showed that a fantastic portion of those people gave themselves failing financial grades. Schools might be the ones responsible for teaching personal finance literacy according to some. Parents could teach financial literacy also if they take the time to learn about personal financial literacy first.
Financial education needed by parents
The National Foundation for Credit Counseling did a Financial Literacy Survey in 2010 asking individuals about their personal finances and the way they learned to do it their way. Most said they learned their personal finance skills from their parents at home. These individuals were then asked to grade themselves on how much financial literacy they have, and 25% of people got a C, D or F. The NFCC concluded that those in charge of the financial education at home are in dire need of financial education themselves.
Personal finance class?
Saving for retirement and college isn’t an option for parents in this economy considering they cannot even afford a house with all the debt they have. If they had just taken a financial literacy course in school, according to NJ.com, they wouldn’t have all these issues. The NJ article explains that even now, there are only 14 percent of teenagers taking personal finance classes in high school. NJ proposed that if the rate of teens taking personal finance classes in school nationwide had been higher in the past, possibly the U.S. economy would be stronger today.
Children likely to find financial failure?
5% of people ages 18 to 21 feel like they will meet some kind of financial goal as Wells Fargo reported from a survey. Of all these individuals, 41 percent knew what a credit score and 401(K) was, 31 percent know about compound interest, and only 28 percent know what annual percentage rates were.
A financial tune-up for parents
You or your children may never have to take a financial literacy class, like New Jersey with their pilot project. But until then you can set a good example for the children by getting your financial house in order with a mid-year financial tune-up. Five suggestions are offered by Boston.com:
1. Budgeting your spending – Look at your plan at the beginning of the year and then compare it at the middle of the year with your cash flow. Did you allocate enough to cover expenditures, or are you falling behind in certain areas? Stick with a plan that you put into place after you start tracking anything you spend.
2. Savings — Set aside cash for emergencies and short-term goals. Having a small amount can be very important. Fees and borrowing are easily avoided with, the Consumer Federation of The US reports, just $ 500 additional within the bank at all times.
3. Debt — Carrying high debt loads can have a big effect on your credit score, make monthly budgeting more difficult and leave you more vulnerable in emergencies. All your credit cards should be paid off while you stop using them to avoid the problem.
4. Paying taxes – it can be hard to know how much you’ll be paying in taxes this year with the laws Congress hasn’t talked about yet that have expired. But tax rates are expected to go up for all but the lowest income brackets in 2011,so be prepared.
5. Retirement plan – plan your retirement with more than just a 401(k). You need to also plan to have company pensions and Social Security. Plan ahead with how much money you need to be providing yourself also.
NFCC
nfcc.org/
NJ.com
nj.com/opinion/times/oped/index.ssf?/base/news-1/127917270889880.xml&coll=5
Boston.com
boston.com/business/personalfinance/articles/2010/07/16/a_midyear_personal_finance_checkup_will_help_in_getting_you_to_the_finish_line/
