Have you ever asked, why in the world didn’t they teach you about financial intelligence in high school? Jim Rohn said that “if they would have taught Wealth 101 and Wealth 102 in high school, I would’ve taken both courses.” I totally agree with him. Financial education, that is, practical, useful information that will put money in your pocket is hardly ever taught in most school systems. Instead, most of us were taught how to dissect some type of animal, like a frog (in my case it was a cat!). As it turned out, a lot of the information that was taught in high school has proven completely useless as far as putting money in my pocket. (Unless I decide to go to medical school and become a veterinarian!)
The sad truth is that a lot of the stuff that they bombarded us with in high school seems to have been an attempt to group us into some kind of category. Children are usually taught to follow norms and procedures, comply with the status quo, and become slaves to the system. Parents have a responsibility for their children’s well being, which includes their education. Unfortunately, the lifestyles that are being led, has forced many parents to spend less time with their children. Thus, much of this responsibility is placed on our school system.
Effective money management is a subject that is neglected in our high schools. I’m not talking about basic math and arithmetic skills. What I’m talking about are basic money management and financial skills that if taught early on, can have a significant impact in someone’s life. I’m talking about the financial consequences of being an employee as opposed to a business owner. I’m talking about skills like how to save money by learning how to maximize your credit score, how to prevent high interest rates on mortgage loans, car loans and credit card payments. I’m talking about thousands and even hundreds of thousands of dollars worth in savings just by learning how those three digits can impact your lifestyle and your family’s well being.
We currently face what many are calling a “worldwide economic crisis.” These so called “doom-sayers” may not be too far off, considering that in some countries, hunger and famine prevail. In some cases, food is portioned in order to feed as many as possible with the few resources available. Locally, many feel the “squeeze” as gas prices continue to go up, in an effort to keep up the pace with the “precious crude.” It seems that food costs, health care and everything else is on the rise. Those who properly learn how to manage their finances will prosper no matter what the economic environment surrounding them is like, because they’ve created habits that will allow them to prosper regardless of the situation.
Children are like sponges. They soak it all up. The sooner they pick up good habits, the better off they will be later on in life. Many teachers do a fantastic job, however, no one will teach, care for, and protect your children better than you. Teaching your children the following habits will help them to be responsible when it comes to managing their finances.
Save and keep money in your pocket. Regardless of how much you earn, keep 10% of your income. The money that you save will eventually generate more money.
Control your spending. This seems to be common sense. However, problems arise when income and expenses increase at the same rate. Make a list of those necessary expenses and create a budget to pay for them using only 90% of your income.
Instead of working for money, make your money work for you. I give specific examples of how to do this in my webinar.
Protect your money. Before you invest in anything, analyze the possible risks and benefits. Seek expert advice.
Managing your finances effectively requires commitment and discipline. That is, once you’ve established “financial peace of mind” as a goal, it means doing whatever it takes to achieve it. Take advantage of the opportunity to teach your kids how to handle money appropriately. It will be their most valuable lesson and they won’t teach them about it in school.
Juris Doctor, professional speaker, trainer, and consultant. President and founder of ABC Training and Counseling Corporation, organization which promotes personal and organizational growth and development. His passion is to serve, teach and inspire others to achieve their goals. Has over 16 years in management and business administration experience. Has taught social science and criminal justice courses at American University. Certified in Alternate Dispute Resolution Methods. Volunteer for Youth Ministry & Mentor for Puerto Rico’s Youths at Risk Program. Founding Member of the Puerto Rico's Toastmasters Club.