Welcome back to Part Two of Raising Money Savvy Kids!
Last week, in the introduction to this series, we talked about what it means to be money smart. And today, we’re going to talk about something equally important: teaching children about money. Now, chances are that most of were brought up to know the value of a dollar. Or at some point in our lives, usually by the time we were teenagers, we definitely understood money.
But why is it so important to teach kids about money?
There are many reasons why teaching your child about money is so important.
Here are four good reasons to teach kids about money:
* You want them to be less stressed about their finances when they’re adults.
* You want them to be able to live comfortably.
* You don’t want them living at home when they’re adults because they cannot afford to live on their own.
* You want them to do better than you.
And one of the most important reasons to teach kids about money?
Bankruptcies and Debt
Learning about money now can help your child avoid some of the biggest money mistakes that people make. Perhaps you’ve made these mistakes yourself.
We’re talking about deep debt and bankruptcy. Here are a few statistics to consider:
* Every year more than two million people in America file for bankruptcy.
* The average American household with at least one credit card has nearly $15,950 in credit card debt (in 2012), according to CreditCards.com.
* According to the Department of Education, the default rate on federal student loans has risen by about 5 percent in the past year and 500,000 more borrowers have slipped into default.
Teaching your child about money and starting when they’re young can help them avoid these unfortunate situations. No one wants financial stress and presumably no one really wants to file for bankruptcy or go into massive debt. At least that was something that I never aspired to do.
So is it really that important to teach kids about money? I definitely think so. Teaching kids about money and how to be money smart, are definitely important.