It has always been a good idea for parents to teach their children about the value of money and how best to spend it. It has also always been wise for parents to teach children about the importance of saving and investing, as well as how money can be used to make a difference in this world through charitable giving.
But most parents do not feel comfortable or properly qualified to carry out these financial mentoring tasks. For example, a 2003 survey of parents by Fleet Boston revealed that only 27% felt well informed about managing household finances. Fewer than half felt they are good role models for their children regarding saving and spending.
Their actual spending habits reflect why so many feel they are not good models. The average credit card debt in 2004 among 25 to 35-year-olds, including parents, was $5,200 which is twice what it was in 1992. And over 60% of families pay the minimum amount of their credit cards, creating a continuous family debt situation.
At the same time, their children receive little outside education on financial management and the majority still look to their parents as their primary teachers in these areas, according to surveys of students by Capitol One. Of the participating students, the majority failed a basic quiz evaluating their knowledge of financial management.
It seems to me that this situation speaks loud and clear for parents to receive education on how to mentor their children on financial matters like spending, saving, investing, and giving.
What do you think?
Should parents be provided with formal training in mentoring and guiding their children's financial literacy?
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