I love teaching my kids. I am so happy when after my huge efforts I can see them riding a bike for the first time. Or swimming. Or reading. Or doing something else. The thing I enjoy the most is the link between my effort and the result which would definitely help them in the future.
However, for quite a few years now I have struggled with one thing – teaching them financial literacy. There are 5 problems related to this.
Firstly, the link between the effort and the result is not so immediate. If I teach my 9 year old son what the budgeting is and force him to do the budget each month, when would that pay off? How do I know I do it the right way? The actual result of this teaching will be visible in 10-15 or maybe even 30 years. I would definitely want some more immediate result.
I cannot convince myself that if I teach my kids what is earning, spending, saving and borrowing, they will be ready for the money world.
Secondly, it is not enough to talk about financial literacy once or twice. You have to do it all the time, consistently and in the way that is interesting to the kids. If this is true, how should I structure this long teaching process not to lose track and, most importantly, motivation?
Who finds financial literacy exciting?
Thirdly, information about financial literacy which I find on Internet seems incomplete. I cannot convince myself that if I teach my kids what is earning, spending, saving and borrowing, they will be ready for the money world. It seems so basic. And so boring.
Fourthly, I have three kids of different ages. I guess I have to teach different things to 9 years old, 6 years old and 1 year old kids. Not that much of financial literacy teaching to the 1 year old though…
And finally, maybe I am already good at teaching them? How can I assess my teaching skills? There are quite a few tests on the level of financial literacy when you grow-up. But am I doing well as a parent?
It’s not just knowledge that is important
After quite an extensive analysis of various information on the Internet I came to a conclusion that there is more to financial literacy than just earning, spending, saving and borrowing. Actually, there are 3 layers of financial literacy: knowledge, habits and beliefs. While it is quite easy to pass the knowledge to the kids, it is much more difficult to form habits. And it’s even more difficult to ensure that they have the right beliefs about money.
Great, I am closer to success now. But I still need more structure to the teaching. I need a mentor who could lead me through this long process of teaching financial literacy to kids. Somebody who could give me all tools in one place and teach me how to use them. A person who could structure the information based on kids’ age. Another parent who could tell me whether I am doing it right and what could be improved. Am I the only one here?
If you have similar concerns, the first step is to take Financial IQ Test for Parents to assess your skills as a parent. After that I will give you clear guidance how to improve in the weakest areas.