Most parents would agree that preparing children for a lifetime of independence is a fundamental goal and responsibility. It’s also a leading reason why we celebrate our kids’ milestones—big and small—from their first steps, to their first day of school, to graduations, birthdays and more. Each step forward brings them closer to becoming confident, self-sufficient adults. Yet, InvestmentNews reports that, compared to other nations, we fall short when it comes to preparing children to become financially independent. Although the U.S. is the world’s largest economy, the Standard & Poor’s Global Financial Literacy Survey ranks it 14th (tied with Switzerland) when measuring the proportion of adults in the country who are financially literate. To put that into perspective: the U.S. adult financial literacy level, at 57 percent, is only slightly higher than that of Botswana, whose economy is 1,127 percent smaller.
Experts in economics and education have long advocated for schools to provide courses on personal finance, but the emphasis has been on high school and college. According to the Consumer Protection Bureau, children are ready to learn basic money management skills as early as age three—which means we are leaving a lot of years on the table. Based on the Bureau’s research, skills such as “planning ahead, waiting for things they want and finishing what they start” form the foundation for behaviors that support financial well-being later in life, such as goal setting, saving for the future and sticking to a budget.
Whether your children are eight or 18—or anywhere in between—it’s never too early or too late to teach them practical money management skills. But where do you start? That can be challenging for parents and educators who may not view themselves as financial experts. Fortunately, there are a growing number of programs and resources designed to increase financial literacy at all ages, many of which incorporate games, mobile apps and other technology to engage children and young adults.