It is my opinion that, as parents, we have an obligation to teach our kids about saving and financial matters in general. I believe that teaching our kids about saving and financial matters is just as important as teaching them honesty and integrity, and even sexual matters. Yet, as is the case with sex, many parents are uncomfortable teaching their kids about financial matters.
I believe this is a big reason why we have a savings crisis in America. In the first half of 2005, the national savings rate fell to ZERO, down from a high of over 10% in the early 1980s. By the end of last year, the national saving rate had fallen into negative territory, -0.5% according to the Commerce Department. The Commerce Department calculates the savings rate by taking the difference between after-tax income and all expenditures, including housing, food and clothing.
Every three years, the Federal Reserve conducts an in-depth consumer survey called the Survey of Consumer Finances. These surveys glean lots of data on trends in consumer saving and spending. The latest report for 2004 found that only 40.8% of all households actually save on a regular basis, and in reality, that number may be high. In addition to the negative savings rate, the American Bankers Association reports that the average US household has over $8,000 in credit card debt. Credit card abuse by college students is epidemic.
I could go on with troubling statistics on debt and the lack of savings, but the point should be obvious. If we are going to educate our kids about the importance of saving, we must not only teach them, but we must also practice what we preach. Kids whose parents don’t save are not likely to be good savers either.”
I found this article on localhs.com and really liked how he spoke to us about kids and money.
I hope you enjoyed this one.
Cheers…Amanda van der Gulik….Excited Life Enthusiast!