SIGNIFICANCE OF SHAPING KIDS` FINANCIAL LITERACY

Financial literacy begins at home. Parents play a significant role in educating their children about money, as it can affect how they will handle their finances in the future.

A 2008 Parents & Money survey by Charles Schwab stated only 34% of parents have explained to their teenagers about balancing a checkbook or checking accuracy of statement, while 29% have taught them how credit card interest and fees work. The same research showed 75% of parents believed they are financially savvy on budgeting, managing credit, saving, and investing. But only 69% of them felt less prepared to guide teenagers on investing and the like.

Who should teach financial education to children? Like what was said before, educating them begins at home. Therefore, we should not expect the US government to come up with measures pertaining to financial education among children, although it remains a matter for the local officials in every state.

But some political leaders once sought to include this topic in the K-12 curriculum in 2014. Based on a 2012 Consumer Financial Literacy survey, 59% of adults have savings, while about one in four continued to live within their means. The finding is quite alarming, which is why both local authorities and banking organizations prompted them to promote financial education themselves. For instance, the American Bankers Association introduced "Teach Children to Save" program, focusing on the importance of saving for the rainy days.

Generally speaking, parents and schools must work together to create a comprehensive education to their children. While parents are responsible for nurturing positive behavioral patterns and imparting fundamental values, educational authorities should handle the academic aspect of this subject matter. But before empowering their kids, parents should acknowledge and understand their own shortcomings when it comes to financial literacy. Remember, the only way to overcome financial illiteracy is education.