My research has shown that 97% of women believe that it is very important to educate their children in financial matters. Are we talking about money with our kids or grandkids? And if so… how are we talking about it?
One corporate executive told me she became increasingly frustrated that her daughters only seemed interested in “What can we buy?” They live in an expensive neighbourhood and she was concerned that they thought that ‘money grows on trees.’ She now discusses the concept of work with her girls and elaborates on her hours, what she has to do in a day, why this is important to her sense of self and how it offers their family their privileged lifestyle.
Even small efforts to encourage our kids to learn about math and money can pay big dividends over time. But interestingly, only one in ten Canadian women have encouraged their children to take courses or read book about financial matters. We don’t think twice about hiring a piano teacher or a driving instructor. If you don’t have time to do it yourself, why not hire a money tutor? Lessons on the basics work wonders: how to earn an income, how this supports a lifestyle and the need to have a pension or retirement savings.
What happens if we don’t educate the next generation about money?
It is amazing how many women admit that they didn’t know what interest rates were until they were in their 20s! An equity analyst spoke to me about her first eye-opening experience with money. “I never had any real training in high school or anywhere else, so when I went to university, I was a complete novice at handling my financial affairs. It was hand-to-mouth. I didn’t really ever budget. I can safely say that all my lessons were learned through trial and error – for example – I cashed a 19.75% GIC when it had 4 more years of that guaranteed high interest rate. My father’s shock at my stupidity was enormous and prompted me to begin figuring out the power of compounding! I hope my children learn enough from me and never make that kind of mistake.”
Financial errors can obviously be quite costly and our kids may be in for serious disappointment when they find out that “No Virginia, there isn’t a money tree!”