Financial Literacy

After Thanksgiving, I am going to give a talk to all of the 5th graders at my son's school about financial literacy. I am an accounting professor and presumably should have some thoughts about financial literacy for children, but in actuality, I am just as clueless as any other parent about what kinds of skills and information and knowledge to impart.

Part of the problem is that discussing finances, money, resources, and personal economics is such a taboo topic in our culture. I was reminded of this implicit ban on discussing monetary costs this morning, when my husband and I received a quote to replace our home's exterior siding and to remodel our master bedroom and bathroom. The quote was so large, about three times higher than the highest estimate that Google had earlier predicted, that my first instinct was to laugh. My second instinct was to discuss this estimate with other people, to see if it was anywhere close to realistic. But to do so would be discussing money, and it feels inherently taboo and icky and personal to discuss money with anyone not directly involved.

I struggle with how much of our finances to share with our own children. Our children have asked how much we earn and I have resisted telling them. But I wonder if keeping them in the dark is doing them a disservice. Perhaps if I were to show them a paycheck, accompanied by how much was already taken out up front for various taxes and other contributions, along with our typical expenditures for the month, they would start to intuit some of the costs and trade offs that come with making financial decisions. Or perhaps I should make them responsible for more expenses. My daughter will be off to college in three and a half short years, and I worry that her financial involvement to this point has been deciding how to spend or save her monthly allowance.

Some of this financial illiteracy is due to our privileged position. When I was in high school, I had multiple friends who worked as soon as they were old enough, not for spending money or to save toward future college costs, but to contribute toward their parents and recurring household expenses. Being shielded from financial realities is largely a result of not having economic worries. But it may not be the best long-term solution for good financial health.

I will probably end up looking at Pinterest for what kinds of financial topics to discuss with 5th graders. And it is easy to speak in generalities about financial literacy and health. But knowing where to draw the line on real-life financial examples is much more difficult.