A Lesson Learned

I took most of the advanced classes in high school, including calculus, physics, chemistry and the like. Not a big selection, but it was the stone age so I had slim pickins. Nonetheless, there was no personal finance class available, or any finance class at all for that matter. Learning how to manage your finances, how to save for retirement, how to save for your home and how much home you can afford, were all basics not available to me in school. Sure, there were finance classes in college but those were mostly tailored to those majoring in finance and they did not focus on individual finances for the most part.

I have a daughter who just turned six and a son who is two and I fully intend to teach them how to manage their finances. My daughter gets an allowance and half goes in the spending jar, a quarter in charity and a quarter in savings. I could tax her a third to teach her that lesson but that would just be too cruel. She will learn about taxes soon enough.

I just think our schools are leaving out valuable lessons that kids need to live a happy, productive and less stressful life. Life is too short to be spending most of it worried about debt. I have a fair number of relatives who were unable to manage their credit cards as they were never shown how. When you add to that the fact that the latest generation seems to be the entitilement generation, and you have a deadly mix. Don't believe me, believe the charts. This linked post at Sudden Debt has two of the most enlightening charts you will see this year. They compare individual income and GDP to debt over the past few decades. These are not at all pretty and I hope I can teach my children to avoid this trap.

http://suddendebt.blogspot.com/2009/10/more-personal-look-at-debt.html

Disclosures: None.