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Why give the gift of financial literacy?

We all like to give our kids the best we can afford, don’t we? We also wouldn’t dream of having them grow up without the grounding of a good education. Sometimes though, while trying to provide our kids with physical items and a good secular education, one of the most important gifts we can give to our children can often be overlooked, the gift of financial literacy.

As April is financial literacy month in the US this post is part of a group of posts being shared today by personal finance bloggers who are relating their greatest money A-ha moments. My eldest son started school this year as a result a huge A-ha moment has come my way as I’ve been reminded about the kind of things that are taught at schools and those that aren’t, and even more importantly what a huge responsibility that places on me as a parent. A-ha!

Why financial literacy is the most important gift

When it comes to controlling our money you would think that with all of the fancy apps and online tools we have, we would all be financially super savvy by now. The truth though is that these apps and tools have only sprung up because it has become more difficult to keep a track of and control our money, not less. While technology can instill confidence in some people, sometimes it can also lead to complacency as we rely on our new technical tools and lose track of the basics rules and principles of good money management in the process. I’m not saying that this is the case for everyone but it certainly will be the case for some. I would say that – with the hundreds of credit cards, mortgage schemes, finance agreements, online fraudsters and other financial scams out there – personal finance is as complicated, if not more complicated than it has ever been. The sheer volume of topics personal finance bloggers find to write about is testament to that.

With all of this complexity it is so easy to make mistakes and get drawn into financial danger if you haven’t been on the receiving end of a good financial education before hitting your adult years. As the state educational system still isn’t doing enough to address the more practical side of financial literacy – not just the ability to add and subtract – it is really left to us as parents to shoulder that responsibility. It is a great feeling to be able to give our children toys and gifts but in my eyes there are much more important things we can give to our kids than possessions. Things like a strong moral compass, showing them how to lead a healthy lifestyle and the gift of financial literacy are just as important as any physical gift we might give.

Financial literacy week

I’m publishing this post because this month is financial literacy month. Today a huge group of my fellow personal finance bloggers will all be writing different posts on the subject of financial literacy as part of a blog carnival organised by my good friend Shannon over at The Heavy Purse. If you want to read some of these posts then please head on over to the carnival and check out who is involved.

Financial literacy is not something that comes naturally to most people, generally it is something that needs to be taught and learned. Our schools and educational systems do a great job of educating our children but when it comes to financial literacy there is still much more that can be done and the buck doesn’t stop with them. If we want our children to avoid some of the financial mistakes that have been made by many people again and again over the centuries then we need to work hard to pass on one of the greatest gifts we can give, the gift of financial literacy!

Why is financial literacy important to you?

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18 Responses to Why give the gift of financial literacy?

  1. You are right there are much more beneficial skills we can transfer and teach our children other than the skill to shop and spend money. Teaching children while they are young by setting an example may potentially help them from years to come if not for the rest of their lives.

    • Adam Buller says:

      That’s certainly how I feel Mr.CBB. It’s a big responsibility but it’s one that we simply can’t afford to ignore.

  2. “Things like a strong moral compass, showing them how to lead a healthy lifestyle and the gift of financial literacy are just as important as any physical gift we might give.” Amen, Adam! As much as I want schools to teach personal financial education – it is the parent’s responsibility to show their kids how to spend their money in alignment with their values. I want my girls to have a great life and I know that it’s more than having the latest and greatest in toys, gadgets and clothes … it’s knowing how to make smart decisions with their money. This is how I truly help them succeed in life. Thanks for sharing your money a-ha and participating the Financial Literacy Awareness Carnival.

  3. Financial literacy gives me the knowledge and freedom to live the life I want without fear of total financial collapse.

  4. Financial literacy is important to me because it changed how I look at money. Before I just spent, without really thinking about how I was using my money. I had money, so I spent it. I didn’t stop to think if there was something more important than whatever it was buying. It took me years to realize the answer was YES! I wasted a lot of money on things that I don’t even recall. It’s a deep regret of mine that I didn’t think about what I really wanted or set priorities. I am, however, glad today I know better!

    • Adam Buller says:

      It’s amazing how money can just slip away when you don’t keep a proper track of your spending isn’t it Tanya. At least you can always change what you do in the future though hey!

  5. Awesome post, Adam. I wish more parents understood the importance of teaching their kids all of these things. So often, we fail to understand the seriousness of guiding and raising our kids up, and then we are shocked when they turn out as adults with no direction, no “moral compass” as you mentioned, and no idea how to live life responsibly and happily, in money and everything else. And money is a key part of how the world goes ’round. We’d be doing our kids a huge favor if we’d commit to teach them how to manage, save, spend and invest money properly.

    • Adam Buller says:

      Thanks Laurie! I really didn’t expect the moral compass bit to strike a chord with people like it has. When you think about it though it does seem to be missing in so many areas of society and it is a huge responsibility on our shoulders to instill it into our kids, along with the financial compass of course. ;-) Hope you have a great weekend.

  6. If only every parent would give this gift! You teach this to your children not just directly, but also with your example. It’s a wonderful gift! Of course, every child is different and parents will have to be creative in ways to teach them. It’s worth the effort!

  7. I want to give my son financial literacy because I want him to not make the same mistakes I did when he becomes an adult and ventures out on his own. We’re building that solid foundation….hope he uses it!

  8. Financial literacy came a little too late for me. Having married at a very young age, I relied heavily on the spouse about everything financial. Then the 22-year marriage had to end and I was at a lost, absolutely clueless about financial wisdom. If only it was taught in school or something when I was younger.

    • Adam Buller says:

      At least you can always get a second chance Jen and you’re right, it should be given more attention in school.

  9. Great article.
    I have three teens and think it is so important for them to learn financial competence. So many parents think that in order to be a good parent, you should ‘give’ your child as many material goods as possible, but that is not how the world works. It is so important for young adults to learn about saving, budgeting, interest, investments, loans etc. and that all starts young. It should start when they are really young, working out whether to spend some pocket money on the ice cream, or save it to buy something better next week. It doesn’t work if Mum and Dad buy the ice cream anyway!

    • Adam Buller says:

      Thanks Thrifty! It can be easy to underestimate just how much information kids can take in and store at a young age. Some of the comments my eldest boy (Age 4) comes out with at times has shown me that they are very capable of understanding quite complex information. He was explaining what Symbiosis was the other day, so I’m sure he’ll understand the concept of interest on savings very soon ;-)

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