During my senior year in high school, I took an elective Business class. For a portion of the semester, a neighborhood banker helped us start and run a campus business through the Junior Achievement program. Our class decided on a coffee stand. We were assigned marketing, finance and other operational roles. The few weeks that we planned for and operated the business were the highlight of the class because the teacher must have been coasting toward retirement (or was just a bad teacher). I didn’t know at the time you could do so little and keep a job. One student in the first row literally slept in class almost every day.

We made some money from the coffee stand until one day the student in charge of the finances moved away with the money without telling anyone. I’m fairly sure we didn’t make enough money for that to be the real reason the kid skipped town but nonetheless, we got hoodwinked — a valuable lesson in its own right.

Can we count on schools?

I remember as a kid people were always saying schools should teach students how to handle money. Today, I hear the same thing. Of course, finances are taught here and there in schools, but largely nothing has changed in the education system. I believe the reason I actually learned something in my dysfunctional business class was because the material was far different from anything I had been taught before. It was like a tiny drop of water that gets lapped up by a desert wanderer. I believe many kids thirst for financial knowledge even if they don’t recognize it. If personal finance is ever taught regularly in schools someday, I would be a huge proponent. But, at this point, nothing has changed, and kids are growing up into financially illiterate adults. Can we try something different?

Ideally, it starts at home.

Finances need to be taught in the family — primarily from parents to kids. I’m not suggesting a government mandate of some sort. Instead, I’m suggesting…

• You do what you can in your family and maybe even to help other families.
• Financial advisors provide resources and teaching points to clients who are parents, and either are or will one day be advisors to their children.
• Banks and financial institutions do more to promote and incentivize savings habits for kids (after all, they are tomorrow’s customers).
• Family-centered organizations like churches do more to teach financial principles.

Yes, these are all being done to some degree. A lot of it is good work spearheaded by a motivated few. We could and should be doing so much more. Young people are getting into substantial debt before they even have their first job. This inevitably leads to financial bondage and delays in investing, buying homes, charitable giving, starting businesses, and having children.

Chuck Swindoll said,

“A family is a place where principles are hammered and honed on the anvil of everyday living.”

Keep it simple.

Simple, everyday situations provide ideal teaching opportunities. If one of my kids asks if we can go out to lunch, I can say yes or no. “Yes” is sometimes the answer and met with their gratification. “No” is sometimes the answer but inevitably followed by the question “why?” How I choose to respond can teach a lesson or waste a simple, real life opportunity. “Because I said so,” teaches nothing. “Because we went out to lunch a couple weeks ago and we want to be careful not to overspend our money by going out when we have food at home,” communicates a watchful eye on spending within our means and delaying gratification when appropriate. Everything does not need to be a sit-down book lesson in finances to make a difference. Rather, it takes recognition of teaching opportunities in everyday life and a willingness to take advantage of those moments.

Posting a job chart at home with ways to earn money can teach invaluable lessons. Ron Lieber, in his bestseller book The Opposite of Spoiled: Raising Kids Who are Grounded, Generous, and Smart About Money stated,

“Kids like to work and enjoy earning money; we just don’t do a good enough job of encouraging their industriousness and helping them find new ways to earn.”

Once children have money (no matter how little), they can begin to learn that each penny can go toward one of three primary things: spending, saving or giving. Making purposeful, prioritized decisions at an early age can engrain a sound decision-making process.

In our home, our children are responsible for minor expenses to help them learn to manage cash flow and pay on time. I’d rather they mess up now and learn the lessons of being late or overspending when the consequences are minor. Mistakes are learning opportunities. My youngest son, Henry, wanted to buy a video game in the worst way, so I offered to loan him money. I chronicled that story here. That was fun (for me, not him), and he won’t soon forget the pain of debt!

A step for change.

Our financial advisory firm, One Degree Advisors, focuses on family-centered financial planning often engaging different generations within each family. Some might say we are the family office for non-billionaires. We are finalizing details on our Money Smart Families program and expect to roll that out this year to our clients. This is designed as an age-based curriculum on how to manage money wisely for families with very young to college-age children. Children will learn financial decision-making, how to earn money, leadership traits, financial principles like compound growth, preparing to buy a car, building a resume and much more. Parents will not only learn how to guide their children through these topics but also how to prepare for the costs of raising children, how to communicate with their children about college selection and cost, and much more.

We believe this will be a step towards greater financial literacy. It provides parents with one of the greatest gifts they can give their children. We sincerely believe that passing wisdom before passing wealth to the next generation helps minimize the potential harmful effects of money and instead can be a powerful source of positive impact.