44% of American families spend more than they earn
The average American household carries over $8000 in credit card debt
Money is the #1 cause of divorce
And these figures were BEFORE the current crisis.
It’s scary—not only the economy; but the issues around our unhealthy relationships with money—as a society and as individuals. When it comes to money, otherwise smart people can do some very dumb things.
I’m not pointing fingers or naming names (though the name Madoff leaps to mind). I’m as fiscally challenged as anyone else. Probably worse. My parents were big believers in education but not on this subject— and I didn’t teach my kids any more than I was taught about financial management.
I was surprised to learn most parents make the same mistake—-according to the financial expert I heard recently, on a conference call about money and teenagers.
I can hear parents groaning from here. Teenagers and money go together about as well as ….Tiger Woods and cell phones. Studies indicate most parents would rather talk to their teens about drugs or sex. But even if you don’t talk about it, our values about money are passed on to the kids anyway—by our actions.
And problems can continue indefinitely, after the kids leave home, when many parents still struggle with this issue. They’re blindsided when their kids are blindsided. And it’s no surprise. Though almost all college kids carry credit cards, only 15% of them have any formal training managing finances. Even if you’re not good with numbers, you know what that adds up to: trouble.
It seems logical that the more financial savvy we give the next generation, the less likely that they will create a mess like we’re in right now. Since parents have varying competence, I’ve always thought schools should teach kids more real life skills so they don’t hit the wall in real life. H & R Block is doing that, with its program to fund financial education ( apply for your school before February 15.) Their site also has tips for parents from financial psychologist Dr. Brad Klontz, whose book I’m giving away on Cluttercast.
Fortunately I don’t need to read the book myself. Thanks to a financially astute ex-husband miracle, both of my kids magically turned into young adults who manage money responsibly. I’m counting on them to teach me.