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Post by Arkadi Kuhlmann, CEO of Savings
The latest national savings rate statistics indicate that we Americans are saving more of our incomes than we have in 14 years. Welcome news, right? More to the point, why did the country have to go into an economic meltdown before we resorted to responsible economic behavior? Yet, even as families save more money, a new survey shows parents are less prepared to talk to their kids about money than the birds and the bees – or drugs. Ok, I get it. I have kids. And I want them to be responsible teenagers and make smart social decisions. But pushing financial education to the backburner time and again leaves the door open for future generations of consumers making poor financial choices about spending and saving. It leaves the lessons of earning, saving and spending conservatively – and only the money we have – on the table untouched and unlearned.
Financial education begins at home - and like table manners, it is never too early to start. Kids pretty much imprint their parents. If mom or dad does it, I can too. Parents need to set an example of saving money – not just when it’s convenient but all the time. Make it automatic. Put a little aside each paycheck and tell your kids what you are doing and why. Unfortunately, this isn’t happening as often as it should. The same survey said one in three parents have reduced the contributions they make to their children’s savings. And nearly one in five parents who have savings set aside for their children have tapped their kids’ savings to cover bills or pay off debt.
Albert Einstein famously called the concept of compound interest a miracle. Savers unanimously agree with him as they understand the concept and know how much it makes their savings grow. It is a lesson that makes a major difference in your view toward saving early and often but too few young people get taught things like interest, saving and using their money wisely – either by parents or teachers. Financially responsible decisions need to be a way of life – not a band aid during a crisis. Saving money or giving up credit purchases shouldn’t be like New Year’s resolutions and fall by the wayside when the sun begins to shine again after the clouds of the economic downturn pass. We’ve all experienced the clouds and prefer the sun. Let’s live our lives with a consciousness about our money decisions and set an example for the lives entrusted to us.
Tags: Arkadi Kulhmann, Kids, Parents, Survey
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With power comes a greater responsibility. WIth greater responsibilty comes the fear to tackle it. That is the problem with parents I see these days. I think if we start talking to them about money, they fear the responsiblity part doesn’t pitch in and kids possibly go the other way.
If parents start slow with their kids and trust them whole heartedly, it reaps more rewards. Trust and Honesty go hand in hand and it plays important role in money education with kids.
This is an important topic that should be an integral part of our family’s lives as well as their future. Too many Americans are being left behind because of the lack of financial responsibility which is partly due from the lack of financial education being taught in our school systems. We haven’t prepared or educated ourselves on this topic as parents - which is why we don’t have the confidence to talk to our children about financial decisions that will affect them later in life.