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Better late than never: teach your kids good financial lessons
发布日期:2024-12-23 23:59:55
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Parents spend many years reviewing their children's report cards. A recent study essentially turned the tables on that, with young adults reviewing their parents' performances, particularly in regard to financial matters. The findings weren't good: Gen Z (people between ages 12 and 27) is the least financially confident generation, and a third of them say their parents didn't set a good example for them.

There's a reason for the parents' poor performance and a reason why young people should feel more confident about their financial futures.

Why many parents set poor examples

Before you blame your parents for not helping you get savvier, financially, put yourselves in their shoes. You might be lamenting that your school never taught you much about money, but your parents likely got even less financial schooling.

According to a 2023 Edward Jones survey, 80% of respondents said they never learned money skills in school. So, like most folks their age, your parents were just doing the best they could.

Many ended up deep in debt or facing other financial troubles, often without realizing how dangerous it is to overuse a credit card and how debt at high-interest rates can balloon over time.

How parents today can set good examples

Here's what your parents might have done had they known more about financial matters, and what you might do with your own kids now or whenever you have them:

Basically, you want them to grow up fully aware of financial matters and of how to manage money sensibly.

Meet the millionaires next door.These Americans made millions out of nothing.

Why young people have a lot to be confident about

Finally, no matter how much they've learned or not learned from their parents, young people don't necessarily have to despair over their financial futures, because those futures can be quite bright. Why? Simply because young people have a lot of something that's vital to wealth building, something that most of us have much less of – and that's time.

Check out the table below, which shows how money can grow over time. It assumes 8% average-annual growth, though no one knows exactly how quickly the market will grow over any particular period. In the past, it has averaged close to 10% over many decades.

Source: Calculations by author.

Young people should see that once they're earning money, if they can regularly invest meaningful amounts, they can amass significant sums, which can help them reach all kinds of goals, such as a reliable car, fully-paid home, supporting a family, enjoying a comfortable retirement, and so on.

You – and young people you know – would do well to take some time to learn more about investing. And then teach others.

The Motley Fool has a disclosure policy.

The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

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