Raising Money Smart Kids Just Isn’t a Priority at Home or in School

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When I travel the country speaking to high school and college students about exactly what they need to do to become financially successful in life, I always begin my presentation by asking three questions:

“How many want to be financially successful in life?”

“How many think they will be financially successful in life?”

Almost every time I ask the first two questions every hand rises in the air. Then I ask the magic third question:

“How many have taken a course on how to be financially successful in life?”

Not one hand rises in the air, ever. Clearly every student wants to be successful and thinks they will be successful but none have been taught by their parents or their school system how to be financially successful in life. Not only are there no courses on basic financial success principles but there are no structured courses teaching basic financial literacy. We are raising our children to be financially illiterate and to fail in life.

Is it any wonder that most Americans live paycheck to paycheck? That most Americans accumulate more debt than assets? That many Americans lose their homes when they lose their job? Is it any wonder that most Americans cannot afford college for their children and that student loan debt is now the largest type of consumer debt?

Parents are often the only shot any of us have at having financial success mentors in life. Parents are responsible for laying the foundation for financial success with their kids. They need to be financial success mentors to their kids.

When parents mentor their kids for financial success, they give their kids a competitive advantage. Why? Because most parents don’t teach their children about money. By the time their kids become adults, and figure out what to do and what not to do, they are already behind the eight ball.

Parents, therefore are the key to the financial success of their children. In my book Rich Kids, I share many mentoring strategies that help parents in raising their kids to succeed in life financially. Here are a few of those strategies:

  • Start Saving Immediately – Saving is a habit that must be forged right out of the gate, with their first job. Start small, say 5% of net income. As their income rises increase their savings rate to 10%. The ultimate goal should be saving 20% of net income by the time they are age 30.
  • Invest Savings – Parents can help their children by directing them to sound financial advisors who will help their millennial children safely invest their savings.
  • Teach Frugality – Don’t mistake being frugal with being cheap. They are two very different things. Being frugal requires three things:
    • Awareness – Being aware of how you spend your money.
    • Quality – Spending your money on quality products and services and
    • Bargain Shopping – Spending the least amount possible, by shopping around for the lowest price.
  • Avoid Lifestyle Creep – Increasing your standard of living in order to match your increased income. It’s a common Poor Habit among many who suddenly find themselves making more money. The Rich Habit is to forgo the desire to spend your money today and, instead, sock it away into savings and investments that grow in value and provide financial resources that can be used in the future to maintain your standard of living. That Rich Habit is called Delayed Gratification – putting off something you want today for something you want tomorrow – financial independence.

At what age should parents start to talk to their children about money? 

Teaching kids about money is a process that should start no later than age 14. When their child reaches 14 then it’s time for a sit down. Alternatively, parents should be directing their kids to read self-help books, particularly ones that teach the fundamentals of money. Giving their child a book to read is a conversation starter. Once the child reads the book, or books, parents should sit down with their children and discuss the key money points in the book. Rich Kids is a good book, since it is written at the sixth grade reading level and teaches sound financial principles. Some other easy to understand books:

  • The Richest Man in Babylon
  • Smart Money Smart Kids
  • Make your Kid a Money Genius
  • The Opposite of Spoiled
  • Clark Smart Parents, Clark Smart Kids

How should parents guide their kids to be money smart?

It’s important for parents to take control of the money children make while working part-time. Parents should establish a savings account at this point for their children and put 50% of their earnings into this savings account. Alternatively, they can start a Roth IRA and invest this 50% into the Roth. This is a great opportunity for parents to teach their kids about investments, such as mutual funds, stocks or ETF’s. With a Roth, parents and their children can watch the money grow inside the Roth. Parents should teach their kids that this 50% can never be touched until they are much older. These savings, even Roth contributions, can be used to buy a car or for college.

When parents fail to do their job as financial success mentors, they set their kids up to struggle financially in life. Since this happens to be the rule, rather than the exception, what can be done?

Schools need to step in and mentor students to be money smart.  How?

High schools need to be teaching financial education to their students beginning in freshman year. It needs to be a multi-prong curriculum that includes the following courses:

  • How to Pay Bills and Balance a Checkbook (freshman year)
  • How to Save and Invest Your Savings (sophomore year)
  • How Insurance Works – Auto Insurance, Home Owners Insurance, Health Insurance (junior year)
  • Understanding Student Loans (junior year)
  • Personal Income Tax Fundamentals (senior year)

Schools teach what they are required to teach. It’s unfortunate, but financial education is not a requirement in most schools and, thus, it is up to the parents to teach their kids to be money smart.

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Thomas C. Corley About Thomas C. Corley

Tom Corley understands the difference between being rich and poor: at age nine, his family went from being multi-millionaires to broke in just one night, due to a catastrophic fire that destroyed his Dad's thriving business. For fourteen years they struggled with poverty. There were eleven in Tom's family, and they lived in constant fear of losing their home.

Driven by the desire to unlock the secrets to success and failure, Tom spent five years studying the daily activities of 233 rich people and 128 poor people. He discovered there was an immense difference between the habits of the rich and the poor. During his research he identified over 300 daily activities that separated the “haves” from the “have nots.” Tom decided to write a book to share what he learned. That book, Rich Habits: The Daily Success Habits of Wealthy Individuals (1st Edition), went on to become an Amazon Bestseller in the United States forty times over a three year period. To give you some perspective, in order to be a true Amazon Bestseller in the United States, where you actually receive a specific Bestseller designation from Amazon, you need to be in the top 100 of all books sold by Amazon in the United States in a given day. Rich Habits did that for nearly thirty straight days, rising as high as #7, eclipsing such Bestselling authors such as Stephen Covey, Robert Kiyosaki and J.K. Rowlings. Imagine that - an unknown, first-time, self-published author selling more books than J.K. Rowlings!

Tom now travels the world, sharing his Rich Habits and motivating audiences at industry conferences, corporate events, universities, multi-level marketing group events, and global sales organizations’ presentations and finance conferences. He has even spoken on the same stage with famous entrepreneurs and personal development experts, such as Sir Richard Branson, Robin Sharma, Dr. Daniel Amen, and many others.

Tom has shared his insights on various national and international network, cable, and Internet television programs such as CBS Evening News, NBC News, Yahoo Financially Fit, Money.com, India TV, News.com Australia, and a host of others. He has been interviewed on many prestigious nationally syndicated radio shows, including the Dave Ramsey Show, Marketplace Money, and WABC.

Tom has been featured in numerous print magazines—such as Money magazine, Inc. Magazine, SUCCESS Magazine, Entrepreneur magazine, Fast Company magazine, More magazine, Epoca Magazine (Brazil’s largest weekly) and Kiplinger’s Personal Finance magazine—and various online publications, including USA Today, CNN, MSN Money, SUCCESS.com, Inc.com, and the Huffington Post. Tom is a frequent contributor to Business Insider, Credit.com, Bankrate.com and a few other media outlets.

National publicity has garnered international media attention for Tom and his Rich Habits research spanning 23 countries. Broadcast media, online publications, and television throughout Asia, the South Pacific, Europe, the United Kingdom, and Central and South America have shared his powerful message.

In an effort to help parents, grandparents, teachers and adults become success mentors to the younger generation, Tom released his second book, Rich Kids: How to Raise Our Children to be Happy and Successful in Life in 2014. This book was the self-help category winner of the 2015 New York Book Festival and Runner-up in the prestigious 2015 Writer’s Digest Self-Published Book Awards Contest. In 2016 Tom released his third book, Change Your Habits, Change Your Life. This book provides the latest science on habit change as well as more of Tom's unique research on the specific habits that helped transform 177 ordinary individuals into self-made millionaires.

Besides being an author, Tom is also a CPA, CFP, and hold a master’s degree in taxation. As president of Cerefice and Company, CPAs, Tom heads one of the premier financial firms in New Jersey.
 
Phone Number: 732-382-3800 Ext. 103.
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