How do kids learn about financial education except through their parents? What do parents teach them? A recent survey showed that most individuals learned their personal finance skills at home, from their parents. But the exact same survey showed that a fantastic portion of those individuals gave themselves failing financial grades. Schools might be the ones responsible for teaching personal finance literacy according to some. Others say that it is not hard for parents to get up to speed on personal financial literacy so they can pass the knowledge along.
Parents in dire need of financial education
The National Foundation for Credit Counseling did a Financial Literacy Survey in 2010 asking individuals about their personal finances and just how they learned to do it their way. Most said they learned their personal finance skills from their parents at home. These people were then asked to grade themselves on how much financial literacy they have, and 25% of people got a C, D or F. Everyone within the home should be getting a new financial education because of outdated ways being taught within the home, as outlined by the NFCC.
Reading, writing and personal finance?
Saving for retirement and college isn’t really an option for parents in this economy considering they cannot even afford a house with all of the debt they have. All of this might have been avoided with a simple financial literacy course in high school, according to NJ.com. The NJ article explains that even now, you will find only 14 percent of teenagers taking personal finance classes in high school. If more personal finance classes had been taken, the US economy, when asking NJ’s opinion, would be unbreakable.
Children and financial failure hand in hand now?
Within the ages 18-21, Wells Fargo surveyed and found that 5% of them thought they might achieve financial goals. Of all these individuals, 41 percent knew what a credit score and 401(K) was, 31 percent learn about compound interest, and only 28 percent know what annual percentage rates were.
Financial details for parents available
Financial literacy classes required, like they’re in New Jersey, might not happen for you. But until then you can set a good example for the children by getting your financial house in order with a mid-year financial tune-up. Boston.com reports five things to work on:
1. Spending on a budget – Compare cash flow in the middle of the year with your spending plan from the beginning. Did you have enough money put in the right areas or are you spending more than planned? Track your expenditures when planning ahead and sticking with that plan.
2. Saving money – Cash loan should be set aside with goals also. Having a small amount could be very important. Fees and borrowing are easily avoided with, the Consumer Federation of The United States reports, just $ 500 extra within the bank at all times.
3. Your debt – With debt you will have a hard time budgeting, especially with emergencies, and your credit score can be effected. You have to stop paying with credit cards and need to pay them all off.
4. Paying taxes – it could be hard to know how much you’ll be paying in taxes this year with the laws Congress hasn’t talked about yet that have expired. But tax rates are expected to go up for all but the lowest income brackets in 2011,so be prepared.
5. Retirement plan – plan your retirement with more than just a 401(k). Company pensions and Social Security adds into it as well. Plan ahead with how much money you need to be providing yourself as well.
NFCC
nfcc.org/
NJ.com
nj.com/opinion/times/oped/index.ssf?/base/news-1/127917270889880.xml&coll=5
Boston.com
boston.com/business/personalfinance/articles/2010/07/16/a_midyear_personal_finance_checkup_will_help_in_getting_you_to_the_finish_line/
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