If millennials have taught the world anything, it’s that they’re incredibly creative, not super patient, and love to spend money. In the United States, adults between the ages of 18–29 have racked $1 trillion in debt. And young adults in Canada aren’t doing much better.
Last year, millennial debt increased 12.4% totalling $515.9 billion which, when you factor in the lower cost of education, is pretty much on par with our American friends.
These figures are scary, and many around the world — millennials included — are asking themselves, “How did we get to this point?” Well, that part is simple:
Nobody taught us.
That isn’t to say that “it’s our parents’ fault”. It’s not! There’s no way baby boomers could have foreseen the aggressive ways in which credit cards and personal loans would have tempted their children.
The amount of debt among young adults is just the byproduct of irresponsible opportunity (with good advertising) and an underprepared generation. So if we want to make things right, we shouldn’t be asking “how did we get here?”. We should be asking:
How do we make sure the next generation doesn’t find themselves in the same tough spot? Well by teaching your kids financial responsibility of course!
The Problem With “Cost” Through A Child’s Eyes
Though it doesn’t always feel this way, money is constantly around us. Everything you see in your house, on the streets, in stores, and even, sadly, in many parts of nature were created by someone with one goal in mind: to make money. And that’s not a bad thing.
Like any other tool, money is neutral and can be put to really good use, really bad use, or pretty much everything in between.
The difficult part for children, however, is that they have no way of understanding this concept because they can’t tangibly see the cost of things. How could they? From the time they’re born, they watch T.V. in the living room, see a fridge getting filled once a week, and every year, on the same day, people inexplicably give them toys.
To children, these things have no cost; they simply exist. It’s why, if you’re a parent, you’ve experienced the difficulty in telling a 3-year-old, “don’t waste your food”. The idea that something could be “wasted” is as foreign to children as quantum mechanics.
Parents, on the other hand, are staying up late paying bills, creating a budget, and trying to figure out how they can afford a trip to Disney land next year. They only see cost because they’re the ones swiping that credit card.
And that’s the problem! Kids are too far from money to understand how crucial it is to their lives, and parents are too close to money to realize that it’s a skill that needs to be taught.
So Why Is It Important To Teach Your Children Financial Responsibility?
Because if you don’t, life will. And life can be a strict, unforgiving teacher.
Companies like Walo, provide the right guidance, for kids to learn how to save, budget and even spend money in a way that will prepare them for a financially stable future.
Will they make some mistakes along the way? You bet.
Will it always be fun? Nope.
But will you be teaching them one of the most valuable life-skills they’ll ever have? Absolutely! Maybe not from day one, but with consistent practice and a friendly way, they can get there.
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Disclaimer, I am an Advisor for Walo.