There’s been a lot of talk in the news lately about student loans and the growing student loans debt, which currently stands at $1.5 trillion. To give you a better perspective of this enormous problem, the national credit card debt, which is of great concern is only $1 Trillion by comparison. What does this mean for this group of young adults and what can you do to ensure your kids don’t become part of this statistic?
I was watching an “on the street interview” of students and recent college graduates sharing their views and experience with student loans. The general consensus was that they all wished someone would have taken the time to tell them what they were really getting into. In hindsight, they felt uninformed and ill-equipped for the decision they made and would make a different decision if they could do it over. Which begs the question, who’s responsible for making sure your children have the financial wisdom necessary to make the right decision related to education expenses?
YOU are! You are responsible for teaching your children about money and equipping them with the knowledge to make informed and wise financial decisions. Colleges, universities, financial institutions, even the government, have no motivation nor the inclination to educate your child about student loans. They’re all beneficiaries of these transactions and have no desire to stop or minimize them.
The problem doesn’t really lie in this one financial decision though. It’s not just student loans that can severely stunt our children’s financial future, it’s an overall lack of financial education that will likely set them up for a lifetime of difficulty.
Be their financial model
When Natalie and I began managing money by a written budget, paying off consumer debt, and make saving a priority, we began to see the benefits. This immediately motivated us to pass the knowledge on to our daughters. We didn’t want them to experience the hardships and stress we had to endure from financial mistakes.
We felt equipped to teach them about managing money wisely because we had been doing it ourselves. You’ve heard the phrase, “more is caught than taught.” It’s true. Your children will mostly copy what you do, not what you say. It’s important that you get your own finances in order first. Get on a budget. Start paying off debt and build an emergency fund.
No experts needed
The good news is you don’t have to be a financial expert. As you practice good money management skills you’ll find that you’re able and motivated to pass it on to your kids. More importantly, you’ll be ready to answer the tough questions your children will ask because you’ve had to wrestle with them yourself.
It’s never too late to teach your children to be better managers. Even if they’re on their own you can still share what you know to help them do better. Of course, it’s best to start when they’re younger, to consistently add more knowledge and allow them to practice it as they mature.
To help you get started, I’ve created a resource that will help you to teach your kids about money. I call it, “A Guide to Raising Money Smart Kids” and I’d like to provide you with a free copy!
I believe the greatest desire of all parents is to see their kids grow up to be responsible and able to care for themselves and their family. As a parent, I know you want to do your best to provide that onramp for your kids’ success, and financial education is a part of that.
I hope the resource I’ve created will help you in teaching your kids to be money smart. Get your free copy below.