Financial Education

Sunday is Mother’s Day. Thank me later if the date slipped your mind.

As we take the day to celebrate all that our moms do for us, let’s not forget the little things our moms taught us — the life lessons that are now habits that run on autopilot, or the routines we watched and later modeled ourselves, and now pass on to our children. If you haven’t passed on any lessons yet, we have some ideas for you.

My mom worked at a time when most of my friends’ moms didn’t and she still took care of the house, her family, and prepared three meals a day. She was also the family CFO — crunching numbers on a calculator that sat on the kitchen counter.

She taught me how to count change, helped me get my first savings account, and drove me to the bank to let me deposit my allowance. She showed me how to plan my spending and compare when shopping. When I got my first job, she helped me get a checking account, taught me how to write checks, and balance my checkbook. She told me to always keep some money set aside for emergencies, and to always try to save some of what I earned. I owe her for a lot all she taught me.

Help for today’s mom

Today’s moms and today’s money lessons aren’t all that different.

A recent survey of children and parents found that 59 percent of the children surveyed named their moms as the go-to person for money questions, ahead of other adults. And nearly three out of four parents surveyed said they have regular conversations about money with their children.

The same survey said kids want to know more about how banks and credit cards work, followed by how to manage money, how to set and achieve savings goals, investing, and the family’s financial situation.

It can be hard talking about some of these topics, especially if you’re unsure about the details. The good news is that moms (or dads) don’t have to be financial experts to answer their children’s questions.

We recently launched a series of questions and answers designed to help parents. They not only answer questions like “Where does money come from?” but they also provide information and activities to help you teach your children about goals, saving, and spending. You can also look at our answers on credit cards, student loans and more.

We also recently hosted a Twitter chat that included a number of resources and tips for parents and shared a fun way to teach kids to save by using Pinterest.

If you need more help, try calling your mom.

Earlier this week, we hosted a Twitter chat along with Kids.gov. Financial experts, authors, and parents joined the #MoneyTalk and shared ideas and resources for talking to kids about money.

One question we saw frequently had to do with bringing up the topic of money for young kids. There were great ideas and suggestions in the chat. One thing you can try the next time you’re at the store is showing them the price tags and discussing how much their favorite foods cost. Let them watch as you check out, and if you pay in cash, let them hand the money to the cashier and receive the change.

Several folks brought up the idea of using games to teach preschoolers. Make it a fun learning experience and dump a pile of change in the middle of the floor and count pennies. Make stacks of five and explain that a stack is equal to one nickel, or that five stacks are equal to a quarter.

Other popular questions were about teaching teenagers about credit. It’s a subject that can be confusing even for adults, but here are some things to cover when introducing your teenager to credit. And, before your kid gets ready to leave the nest, here are ways to talk to them about saving and investing.

The most popular question was about finding ways to teach kids to save. We shared a fun way to do that using Pinterest.

There are many great ways to have the #MoneyTalk with your kids and we encourage you to start that conversation and keep it going.

Share your stories on Twitter and Pinterest using the hashtag #MoneyTalk!

Wondering how to talk to your kids about saving and planning for the items they want to purchase? Pin this.

I’m a dad, so I know how it is. You keep meaning to talk to your kids, but you don’t know what to say. It’s complicated and you’re not sure how to put it in words they’d understand. There’s also the emotion, anxiety, frustration and, yes, guilt.

I’m talking about money. And, so should you.

Because only 14 states require a course in personal finance in schools, parents and caregivers are the first people many children go to for answers to their money questions.

April 20 was the first day of Money Smart Week, a nationwide public awareness campaign designed to help you, your kids and others manage money better. Last year, there were more than 3,000 Money Week events in 45 states.

The CFPB is proud to be a national Money Smart Week partner.

Find a Money Smart Week event near you, and consider taking your kids – or at least pick up some pointers or materials that could help you have that talk later.

We’ll be hosting a twitter chat this afternoon from 2-4 p.m. (follow @cfpb and look for #MoneyTalk), and  rolling out special questions and answers in Ask CFPB to help you answer your children’s money questions. Tomorrow, we’ll also be introducing a way to encourage your kids to earn, save, and spend smarter using Pinterest.

We think it’s important for kids to start learning money skills from an early age. As a parent, or aunt or uncle, you can be a big influence in your children’s financial futures.

You might be surprised to learn that April 23rd is “Teach Children to Save” Day. Yes, there seems to be a special day dedicated to just about everything. But, compared to celebrations like “Talk Like a Pirate Day,” teaching your kids to become savvy savers can instill lifelong positive financial habits in them and be much less embarrassing for you.

So, let’s lay the most important card on the table first: Kids need to be taught to save. Like washing their hands or brushing their teeth, good savings habits are learned through repetition, consistent practice, and encouragement from you. Start as early as possible with simple lessons that help them understand the value of money, why it’s important to save it, and the difference between buying the things you want and the things you need.

Keep in mind that the best money lessons in the world will be useless if your kids don’t understand them. Make sure the lessons you are teaching are age-appropriate. Try talking to younger children about goal setting and spending choices…in their case, maybe saving up for a small toy or treat. As they get older, introduce more detailed concepts in ways that are relevant to them. Talk to older kids about savings goals like smartphones or cars, introduce concepts like compound interest, open a savings account and engage in fun money discussions with them on topics like the good and bad financial habits of their favorite TV characters.

Resources like Money As You Grow and MyMoney.gov can help you find out what saving and money lessons are best for children at different ages. The CFPB is also hosting a Twitter Chat on April 24th on the topic of talking to your kids about money. Parents can ask questions using #MoneyTalk, and our panel of experts will answer them.

Military life is filled with teachable moments that can help kids learn to save. Incorporate your real life experiences into their money lessons. Use major military events in your career like promotion, permanent change of station (PCS), deployment and transition or retirement as chances to demonstrate to children why it’s important to save, how you do it and potential consequences of doing it wrong…or not at all.

Give your children the opportunity to actually save and manage real money. Were you ready to handle money the first time you had an opportunity? Kids can’t learn to save properly unless they are actually saving. If you can afford it, give your kids a small allowance and let them gain experience making saving and spending choices. If an allowance isn’t an option, talk with them about your family’s monthly income and expenses where appropriate. Help them understand why you prioritize things like rent, food, utilities, college funds and retirement savings over other things.

Finally, you can’t teach kids the value of saving and other smart money lessons if you’re bad at managing money yourself. Get yourself smart about personal finance, so you can pass those lessons on to your children.
Whether it’s saving, home buying, debt management or consumer protection, there are lots of resources out there that can help you learn to make smarter financial decisions. You can get in-person information and assistance at your base Financial Program office. On the Web you can visit us, Military OneSource, Military Saves, SaveAndInvest.org, or other trusted resources that can help you learn how to save, manage your money and raise the next generation of great savers.

Before writing this post, I did a brief survey of my colleagues to ask for their thoughts about what financial literacy means and why it is important. Here are some of the responses I got:

“A fair financial marketplace requires that consumers be informed about the products and services they are buying.”

“What are you going to do when you can’t work anymore? Financing your own future means you have to know how to save and how to protect that savings.”

“People are more empowered when they know how to avoid being scammed. Giving people information so they can protect themselves is, to me, very important.”

“When you talk about poorer populations, it’s about helping them understand ways they can help themselves.”

The point is, financial literacy, or financial capability is not a monolithic thing that can be applied, released, or taught in one way to one group. When we talk about the lack of financial knowledge in the United States, we tend to debate:

• Where it should be taught – in schools or at home.

• When it should be taught – in elementary school, high school, college, or on the job.

• How it should be taught – in workshops, online, games, or over months of coaching sessions.

• Who should teach it – K-12 teachers, financial professionals, money coaches, or radio and TV show hosts.

The good news is there are many right answers.

The one thing most people agree on is that it should be taught, and that it requires more than just a transfer of knowledge. For some people, it may require knowledge and building new skills – practice to build comfort and confidence. For others it may mean unlearning bad habits. And for some it could mean a change in attitude – like choosing healthy eating over double cheeseburgers.

The reason there are so many different approaches to financial education is because there are many different audiences, with many different needs, and many different ideas about good solutions.

We can debate the specifics, the methods, and the media, but there is little debate about the need. It’s why we are working every day to create new partnerships, research new ideas, share best practices, and develop new materials and innovative ways to deliver them.

What can you do about it?

• If you have kids, talk about the family budget. Encourage them to save a portion of their allowance to help them build a savings habit and learn to set, and achieve, financial goals. Ask them what they’ve learned in school about money, or talk to their teachers.

• If you participate in clubs or church groups, invite a local consumer group, credit counselor or financial planner to speak. Download free CFPB publications and share them with your group. Volunteer to help others.

• If you own a business or have the ability to make suggestions, consider a program to help employees understand more about managing their money. Start an automatic enrollment retirement plan or provide resources or referrals to help employees plan for their futures.

How can you help promote financial education? Remember, there are no wrong answers.