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Want Your Kids to Have Good Credit Scores? Start Early
Do you remember who taught you about personal finance? Maybe it was your dad, who let you sit beside him as he balanced the family checkbook. Maybe it was a Girl Scout leader, quizzing you for a badge, or a guest lecturer with the Junior Achievement program when you were in middle school.
If any of these options resonate with you, you were one of the lucky ones.
Only 17 States Provide Personal Finance Education
The Council for Economic Education is pushing for personal finance education in Kindergarten through high school. They’ve released an alarming report, shared in the Washington Post last week, on the status of personal finance across the United States: Only 17 states require high school students to take a personal finance class, and only six of those states test students on personal finance knowledge.
That education can go far: The Federal Reserve reports that people who went to school in states that required personal finance education had higher credit scores at the age of 22 than people in states who didn’t require that coursework.
The Council for Economic Education has created a set of tests to find out how much students know about personal finance in elementary through high school. The results will help determine what’s working when it comes to teaching personal finance, and help create models for personal finance education.
Start Teaching Personal Finance at Home
Until more states implement personal finance curriculum, your best bet is teach your kids about money yourself. As a child, one of The Penny Hoarder founder Kyle Taylor’s chores was reading the electric meter every month to see how much the family was spending. You can give an allowance, and talk often about how that allowance is earned and can be spent. (You can also give an allowance and then take most of it back, in the style of what is probably the most-referenced episode of The Cosby Show.)
But it’s not just about doing chores and talking at the dinner table. Learning about personal finance can be fun. If your child loves to play Minecraft, they’re learning about budgets and saving. Don’t forget old-fashioned board games: there’s a lot to be learned from The Game of Life, Monopoly or Payday.
If your younger family members are itching to start a business, let them! Offer to help your kids post flyers for their new dog-walking biz. Or let them price items for your next yard sale. Just don’t be surprised if they start asking for a commission.
Your Turn: Did you learn about personal finance in school, or another way? Share your stories in the comments!
Lisa Rowan is a writer and editor in Washington, D.C. She also owns a vintage clothing shop, a business that grew out of her love of exploring thrift shops.