When I was about 4-years old, my grandpa taught me how to count coins. He would say, “Lauren, go get your piggy bank,” and I would run, grab it, and dump all the coins out on the floor. Together, we would sit, sometimes for hours, and count the total of all the coins. Teaching a 4-year-old how to count coins is not for the faint of heart. I preferred the big coins; nickels were far more valuable than dimes could ever be.
While this was a relatively small gesture by my grandpa, it stuck with me. Still to this day, on occasion, I will dump out and count all my coins. So, why share this story of my childhood? For me, this small moment taught me something about money. This is often how I think about financial literacy in America today; moments where we can teach others about financial topics are so powerful, even in small moments, such as learning to count coins. Something is better than nothing.
When I say, ‘financial literacy’, I’m not talking about those individuals who attend university and dedicate their studies to Finance. I was one of those students, spending my time studying present value equations and complex alternative investments. Most people don’t need and won’t use this type of information in their daily lives. However, what I noticed along the way is that there is often no dedicated curriculum to teach basic money concepts. This begs the question, why not? As a society, we have a funny relationship with money; we have forced meaning onto it. Today money can represent status, power, aptitude, or societal roles. It can even link to complex emotions and feelings. The reality is that since its origin, money has garnered more significance than a means of transaction; it is not simply dollars and cents.
But the curious thing about this significance is that there is little focus on teaching individuals how to handle that significance. Have you ever stopped to think about how kids are pushed through the school system to ultimately become contributing members of society, but we rarely teach them the basics of money 101? Doesn’t this seem counterintuitive? Money touches almost every aspect of our lives and yet it is not a staple in education.
So what do we do about it?
Honestly, I’m not smart enough to answer this question. But I do know that something is better than nothing. I believe that one of the most valuable gifts that we as contributing members of society can give to the next generation is our knowledge on these topics and our time to help those wanting to learn.
Think about it this way. Below is a list of basic money concepts, which most Americans must figure out without guidance:
How do I pay bills?
Do I need cash? How much? Where should I put it?
How do I budget?
What checking accounts should I have?
Should I open a credit card? How do I build credit? Are credit cards bad?
How do I pay down debt?
Are some debts better than other debts?
Should I rent or buy?
How do I save towards my future goals? And where should I put those savings?
I do not understand my employee benefit options. How do I know which are applicable to me and which is the best option for my specific needs?
Should I invest? How do I invest? What should I invest in?
Should I contribute to employer sponsored plans?
What is compound interest?
If I move jobs, what do I do with my old 401k?
When do I need to begin saving for retirement?
Should I have insurance? If so, what kind?
I have no idea how to do my taxes. How much should I withhold anyway?
What are estate documents? Do I need those?
Am I comfortable with money?
How can I be responsible with money?
What is my relationship with money?
I could keep going, but maybe my most important realization in writing this blog…what if most individuals don’t recognize any of this, simply because they’ve never been taught and don’t know the right questions to ask? I am lucky; growing up and still today, I am surrounded by role models that offer their insight to help me become more financially fit. But I recognize, this is not the norm.
Money is important and touches almost every aspect of our lives. So, what do we do with that importance and how do we use our experience for the good? Maybe it’s teaching a 4-year-old how to count coins. Maybe we follow Texas’ lead and require all students to take a course on financial literacy as a requirement for high school graduation. Maybe you’re already doing this by mentoring family and friends. Or maybe we encourage ourselves and those around us to embrace conversations rooted in financial topics and seek out others who can provide more insight. While we are coined financial advisors by trade, our goal is to educate along the way. We want to continually tackle these questions and perpetuate that knowledge for future generations. It is never too late to build or expand your financial fitness. Let us help.