Raising a financially savvy child
Page 4 of 5
By GreatSchools Staff
A financial services professional offers advice
"I am from Washington state. I have been in financial services for almost 20 years.
"I have offered, on several occasions, to go to my local high school and teach the classes on financial services of all types, so that they would have an understanding of simple/compound interest, check book balancing, life insurance and the types of insurance, estate planning, etc. The principal refused to be involved with it, even though I would have provided all materials, generic in nature, and would have contributed my class time.
"I can tell you that in dealing with adults, they have absolutely no idea what is going on. They do no not understand credit, the 'rule of 72,' mutual funds versus stock investing, pre-tax savings versus post tax savings, etc. No clue. I always tried to get my kids to save 50% of whatever money they received as gifts, and they could spend the other 50%. The adults in their lives thought that was terrible of me.
Editor's note: [Here's an explanation of the rule of 72.]
"It is almost impossible to be viable adults any more without financial knowledge in hand that will allow them to become financially independent and to understand the time value of money.
"I believe that kids should be able to begin investing in their own IRAs etc. at the earliest possible age, to take ownership of their financial destiny. They need to learn that money is a tool and like any other tool, it has its uses if properly used. They need to understand stewardship of the financial world."