Parents lack knowledge for teaching financial literacy to children

For a personal financial education, do children have anyone but their parents to teach them? What is it they learn? A recent survey showed that most people learned their personal finance skills at home, from their parents. The grades of those within the survey are failing when it comes to finances. Some people say that personal financial literacy needs to be taught in school. If parents are willing to put within the effort, it is easy for them to teach their kids the personal financial literacy they should know. Article resource – Parents lack knowledge for teaching financial literacy to kids by Personal Money Store.

Parents are responsible for their own financial education

The National Foundation for Credit Counseling did a Financial Literacy Survey in 2010 asking people about their personal finances and the way they learned to do it their way. Parents at home was the answer to the question from most. These people were then asked to grade themselves on how much financial literacy they have, and 25% of individuals 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 as a basic skill?

In this tough U.S. economy, many parents are drowning in debt, not preparing for retirement or saving for college or able to buy a house. If they had just taken a financial literacy course in school, as outlined by NJ.com, they wouldn’t have all these difficulties. 14 percent of teens within the US take a personal finance class when they are in high school, reports the NJ article. The hypothesis given by NJ was the US economy would be stronger if more teens had been taking personal finance classes.

Children bound to fail financially?

Last year, Wells Fargo conducted a survey and found out that only 5 percent of people ages 18-21 are confident they’ll achieve their financial goals. Of all these people, 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.

Parents need to know about finances

Financial literacy classes required, like they are in New Jersey, might not happen for you. But until then you are able to set a good example for the children by getting your financial house in order with a mid-year financial tune-up. Boston.com reports five things to work on:

1. Budgeting your spending – Take a 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 expenses, 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. Saving money – Instant loans should be set aside with goals also. Even a small amount can play an essential role. The Consumer Federation of The United States found that with just $ 500 in the bank, you’ll sleep better and can be more likely to stay away from high-cost borrowing and nasty fees for overdrafts.

3. Your debt – With debt you’ll have a hard time budgeting, especially with emergencies, and your credit score could be effected. The first step toward solving these troubles is to stop using plastic and chart a plan for paying down your cards.

4. Your taxes – because Congress hasn’t made laws yet this year, it is hard to plan taxes. But tax rates are expected to go up for all but the lowest income brackets in 2011,so be prepared.

5. Retirement — A retirement plan review starts with your 401(k), but it doesn’t end there. It includes Social Security and company pensions, as well. Figure out how much money you have to provide yourself, and then to put a plan together.

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/