Wednesday, April 17, 2013
What Role Do You Play In Your Child's Financial Literacy?
I've written before about how it absolutely astounds me that financial literacy is not taught in schools. Instead, if we want our children to be financially literate, the responsibility falls on our own shoulders.
But how many parents really teach their children about managing money wisely? How many show their children how to put some money aside for savings, some for giving, and some for spending? Who teaches their daughter what interest is? Who teaches their son about balancing a budget?
Well, a recent study released by Massachusetts Mutual Life Insurance Company (MassMutual) suggests that affluent Hispanic moms, with household incomes greater than $100,000, are working to be financially responsible, while striving to flawlessly manage all the household responsibilities. Yet, like many, they’re concerned about the state of their families’ finances and at times don’t know where to turn for help. Like all moms, they too are trying to actively educate their children about finances and involve them in the family budgeting.
I would hazard to guess that this is not just Latina moms with household incomes over $100,000. I can honestly say that my husband and I don't make over $100,000 yet (hey, we might someday!), but I do know that we're trying to be financially responsible. And teaching our kids how to be responsible with money and become financially literate IS something we are actively working on.
And yet, I can totally relate to 34% of the Hispanic moms in the study, who feel like they should be doing more to save for the future, but right now are struggling to just get by. I see our money just flowing right our of our bank account; medical bills, house payments, utilities, groceries, and gas, not to mention clothing for two growing kids, school supplies and classes just gobble it all up.
Take a look at this infographic that best explains the results of the study:
All of it is fascinating, but the thing that catches my eye the most is that last section which shows that on average, Latina moms are starting to educate their kids about finances when the latter are about 6.9 years old. This is probably a good age, and just a little older than mine were when I first create their three banks. But I think I was late and should have started sooner.
When we go shopping, my kids always wind up asking me to buy them something. Sometimes I do, but usually I don't. And it's not just because I don't have the money (again, sometimes I do!). It's because I want them to start thinking about the value of it. I tell them they can save their money and buy it on their own. Because I want them to work hard so that their satisfaction is that much greater when they use their own money to buy something. And because I want them to think carefully about what they spend their money on.
A few years ago, I read somewhere about creating three banks: One for saving, one for giving, and one for spending. I really liked the idea, so that's what we did. Check out their banks. My daughter has done a great job of saving up money. She quickly learned to put a portion away, and eventually saved up almost $200 that she wanted to use to buy a dairy cow. Don't laugh. Because we did. (Aha! Now that picture up top makes sense!)
I like to think I'm doing a good job teaching her about how to manage money wisely. I hope I am, anyway. But to build up my confidence (and because I'm just plain nosey), I took the Mom Financial Personality Profile Survey. It's available in English and Spanish. I was tickled to see myself labeled as "A Successful Planner." (Somebody tell my husband.)
Anyway, my point in writing this whole article and participating in this blog tour, is to encourage you as a mom, to start thinking about how you are going to teach your child to be financially literate...and responsible. Their future depends on your thoughtful guidance. So sit down and figure out your strategy, then implement it. You'll be glad you did!
Join Latina Mom Bloggers and MassMutual on April 25 from 9-10:30pm ET for the #MoneyMami Twitter Party! We’ll be discussing the results of the Mom Survey and sharing tips on household budgeting and finances. Of course, there will be prizes too, including a computer tablet and gift cards! RSVP starting on April 18th, by visiting www.latinamombloggers.com.
Disclosure: I wrote this post as part of my participation in a blog tour for Latina Mom Bloggers on behalf of MassMutual and received compensation to thank me for taking the time to participate. However, all opinions expressed are my own.