When teaching children about finances, parents have little info

For a personal financial education, do children have anybody but their parents to teach them? What do parents teach them? A recent survey showed that most people learned their personal finance skills at home, from their parents. The grades of those within the survey are failing when it comes to finances. Some people say that personal financial literacy needs to be taught in school. Parents could teach financial literacy also if they take the time to learn about personal financial literacy first.

Parents should discover a way to get the financial education needed

The National Foundation for Credit Counseling did a Financial Literacy Survey in 2010 asking people about their personal finances and the way they learned to do it their way. Most said they learned their personal finance skills from their parents at home. But when people were asked to grade themselves for financial literacy, nearly 25 percent gave themselves a C, D or F. Everybody within the home should be getting a new financial education because of outdated ways being taught within the home, as outlined by the NFCC.

Learning personal finance with everything else?

Average parents have a lot of debt right now as they cannot afford to buy a house, let alone conserve for things like retirement and college. NJ.com reports that these individuals may are able to keep away from these troubles if they took basic financial literacy courses in school. 14 percent of teens within the US take a personal finance class when they are in high school, reports the NJ article. The hypothesis given by NJ was that the US economy would be stronger if more teens had been taking personal finance classes.

Kids and financial failure hand in hand now?

5% of people ages 18 to 21 feel like they’ll meet some kind of financial goal as Wells Fargo reported from a survey. Of all these people, 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.

Parents have to know about finances

You or your children may never have to take a financial literacy class, like New Jersey with their pilot project. Keep your own finances in order instead so your kids will learn from you. Boston.com reports five things to work on:

1. Spending on a budget – Compare cash flow within the middle of the year with your spending plan from the beginning. Was enough given to all expenses or do things have to change? Track your expenses while preparing ahead and sticking with that plan.

2. Money to be saved – Short term goals need to be made with emergency money there also. Even a small amount can play an important role. According to the Consumer Federation of America, just $ 500 additional in the bank makes it easy for you to avoid borrowing and fees.

3. Debt – Debt is nasty since your credit score is altered by it and it is harder budgeting, especially when an emergency happens. You have to stop paying with credit cards and need to pay them all off.

4. Your taxes – because Congress hasn’t made laws yet this year, it is hard to plan taxes. Nearly everybody can be paying more in taxes in 2011, so conserve more than normal.

5. Retirement — A retirement plan review starts with your 401(k), but it doesn’t end there. You should also plan to have business pensions and Social Security. Figure out how much money you have to provide for yourself, and then to put a plan together.

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/