What Do Our Kids Really Know About Money?

We hear a lot about financial literacy being an issue — around the globe and among all age groups. The challenge, as I have written about before, is that kids aren’t going to learn about how to manage their money at school — and most aren’t going to learn about it at home (parents can’t teach what they don’t know).

In thinking about this, I decided to conduct my own small test — in the form of interviewing my own 13 year old son, to see what he really knows about money. While not at all scientific, I figured it would be interesting to see what might have rubbed off on him, having been raised by parents who have worked in finance for years. Admittedly, we don’t spend a ton of time discussing money or finances with him, so in many ways his answers are pretty typical on this front.

Here is how the survey went:

Me: When you hear the word “money” what’s the first thing that comes to your mind?

13-year-old-son: Bank.

Me: How much time do you spend thinking about money?

13-year-old-son: Unless it is in a discussion like this, probably one minute per day.

Me: Do you budget or have a financial plan?

13-year-old-son: Really?

Me: If not, why not?

13-year-old-son: Really?

Me: Do you feel like you know more or less about how money and finances work than your peers?

13-year-old-son: Probably the same. No one really talks about it.

Me: If you had unlimited money, what would you do differently than you do today?

13-year-old-son: Not a lot. I am a kid. It isn’t legal for me to do anything money-wise. I’d probably give it to my Dad to invest for me.

Me: What is the one thing you are planning for, or saving for, that requires money?

13-year-old-son: More Einstein puzzles or the video game Borderlands.

Me: What is the most important thing to you in your life?

13-year-old-son: My family. [Editorial Comment — “Awwwwww”]

So those are the results of my mini-survey. As a parent, my takeaway is that while I am delighted with his overall priorities, I think there are things that we can do to motivate more interest and an understanding of finance. A co-worker recently mentioned that he requires his daughter to invest 10% of all money she receives (whether from gifts, or earned) in the market — which can be a great learning experience. My son is a big saver, which is great — but getting him started in investing is probably the next step in getting him to think more long-term, and also to learn more about how finance and markets work.

Ultimately it is a balance. I want kids to be kids — they shouldn’t be thinking about money the way adults do. At the same time, realizing that being responsible with your money is really important and that making good financial decisions can alleviate a lot of future stress, are all things to get a grip on before getting into potential financial problems as an adult. Hopefully this discussion with my son is a step in that direction!