How did you learn what you know about money? For most of us it was the hard way by running up credit card debt or bouncing a check. Which makes me ask two questions:
1. Why don't our parents talk to us and teach us about being fiscally responsible?
2. Why in the 12+ years of schooling do we NEVER take a class on personal finance?
No offense to my Mom but all I was ever taught about money was that we didn't have it. So when you go in to the grocery store, don't ask for anything. So how did I learn what I know? By trial and error. In 1996 I was working at a law firm after school. It was one of the administrative assistants that told me I should sign up for a savings account at the local credit union, so I did. I had my Mom take me one Saturday and from then on I would deposit most of my earnings instead of just cashing my check from the bank my law firm used. Shortly after opening my savings account I got my first credit card. It was Macy's and my limit was $100. When I got the card the only thing my Mom said was whatever you charge you have to pay for plus interest. Right before leaving for college I opened a checking account making sure it was with a bank that had branches in both NC and NJ. I signed up for my account online and somehow I did it wrong so I ended up having to call customer service. And there ends my education on personal finance.
No one taught me about savings, how a bank works and how to manage my checking, the basics of the stock market, credit cards or even how to calculate how much rent you really can afford. Those are basic things that I think everyone should know long before they graduate college and venture out in to the world on their own. I don't want my kids to have to learn from their mistakes or from their friends or from the internet, TV or books. There are some great books out for parents like "Raising Money Smart Kids." You can get a summary of what you should be teaching your kids at every age in this MSN article.
Ultimately you teach your kids what you know. My Mom's knowledge of personal finance was limited to what she knew. I remember one day she asked me if I had a 401K. She said she doesn't know what it is but listening to the news it sounds like something I should have.
I love my Mom but I don't want to be like my Mom. I don't want to have to work in to my later years because I didn't save, didn't have an IRA, 401K or any kind of retirement plans. So the greatest lesson she could teach me is to be an example of what not to do and how not to be when it comes to personal finance.
But it's funny how the world works. For my 29th birthday my Mom bought me an electronic money bank. It counts the money as you put it in to the bank. She said every day I should save any change I have in my wallet. Funny thing is I first learned that from Suze Orman and I have already been doing that for over a year.
How did you learn about money? What do you know now that you wish you knew earlier? Should there be a required course in school on personal finance? At what age do you start teaching your kids about money?
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