Why will parents talk to their children about sex, but not about money?
Once upon a time when I was a young lad, my mom sat me down to have The Talk; you know, the one about sex. Arrrrgh! As soon as I realized where the conversation was heading (“When a mom and a dad love each other…”), I immediately cut it off:
Mom, I learned all about this from the kids on the playground. I know how to be responsible and promise that I will be. Can I go back outside now?
That was the end of that.
The one conversation we never, ever had was about money. A couple times, I asked my mom how much they made and how much certain bills were. Those questions were always quickly shot down:
You do not need to know!!
You would have thought I was asking about their sex life! Ewwww.
Is SEX really easier to talk about than MONEY!?!
I didn’t have my parents to rely on for financial education, but I also couldn’t rely on my schooling.
Where are the schools?
Through the 12th grade, the only financial education that I had was a consumer education class in high school that lasted for one semester. We learned about keeping money in the bank instead of under your mattress and how to buy fruit at the grocery store. While this was useful information, it should have just been the starting point. We never learned about delaying gratification or compound interest. We never learned about saving for retirement. We didn’t even learn about basic things that everyone needs to know like mortgages or credit scores.
Mrs. 1500 learned how to write a check in her consumer education class. But the only thing they really talked about were the sections of the check that needed to be filled out. They didn’t cover anything like having enough money in the bank so the check didn’t bounce.
Sadly, it seems that things haven’t changed much. In my little informal survey of younger family members, there is still very little financial education. Students who take business classes do learn more, but I think it’s silly to have to take an optional class to learn about things that everyone needs to know.
In an ideal world, I think that parents should be our examples and teachers. However, in most cases, this just doesn’t work:
First, many parents are extremely secretive about money. I don’t think my family’s money secrecy was the exception. I suspect most families are like mine. Why? See the next part.
Second, many parents just aren’t good examples. People living the frugal lifestyle are the exception, not the majority. I look around and see big spenders everywhere. Some of my friends are children of big spenders and I see them trying to imitate how they remember their parents, sometimes with disastrous consequences.
Third, a lot of people just don’t understand financial concepts. I don’t think that either of my parents could explain what compound interest is or a mortgage amortization schedule. Even if parents do understand, are they willing to talk about this with their children?
If your parents don’t teach you, formal education may be the only chance you have. However, not everyone agrees.
Is teaching financial education controversial?
If there was any topic that we could all agree on, I would think it would be the need to have more financial education. I couldn’t be more wrong. I get into more arguments about this than just about any other financial subject. To illustrate the point, have a look at some dialog I had recently while commenting on a Mr. Money Mustache post.
First, I posted a comment where I stated that we need better financial education:
The trouble started with Debbie M:
Debbie, I think you have the wrong idea
Debbie argues that she learned about math, reading and the stock market crash in high school and implies that was enough. I couldn’t disagree more. Those are all building blocks, but children need to know why they shouldn’t get into $10K in credit card debt during college. Children need direct examples of how to make decisions surrounding money. Just because you have ‘all the tools’ doesn’t mean you can fix the car.
She also states that frugal choices aren’t marketed. True, but they never will be. No-one is going to go on TV and tell you not to spend your money on their product.
Next to the chime in was Karl:
I disagree with Karl too. I don’t think that people under 25 are too young to learn. Some may not act on the information, but I suspect it would make a difference in others. We have to try. The class that shaped me was one I attended at the age of 20. Guess what, I think about that class all the time. It changed my life.
Next, Debbie chipped in again:
Wow, really grabbing at straws here Debbie. By your logic, why bother teaching anything?
However, my favorite response was the last one from Chen:
Here we are talking about sex again (should this blog be rated NC-17?). Chen draws a connection to sex education. I’m not sure I have any idea what the heck he is talking about, but I think he actually lays out a good case for financial education. He mentions instant gratification and I agree with his point, but a financial education class could teach why delaying gratification is rewarding.
He also mentions how he himself had a little indirect financial education in math class and still remembers it. What a great example of how high school financial education did some good, even if it wasn’t the intention.
To see the comments yourself, check out the comments in MMM’s post on pensions.
Dare to Dream
I hope education is better by the time my children start formal school. Even if it’s not, I am going to strive to be a positive example every single day. I will openly discuss any and all financial matters with them. I will not hide our income and bills. I will let them help with our financial planning. I really can’t wait. The Sex Talk though, not so excited about that…
What financial concepts would you like to see taught in school, and what age would you want your children to start to learn these things? How do you approach money matters with your children or young relatives?
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