This article, “Financial Parenting for Children Growing Up in Abundance,” written by Joline Godfrey, is shared here with her permission. The original article was first published here.
Financial education started with Junior Achievement in 1919. Its goal was to provide vocational training to high school students. By the 1990s, as federal policy introduced financial education as one solution to poverty, poor and middle-class kids were exposed to a wide range of financial literacy classes, entrepreneurship camps, and programs aimed at developing a new generation of entrepreneurs. Financial education in the U.S. emerged as a crucial tool for economic mobility.
Meanwhile, in more affluent homes, money remained as impolitic to discuss in public as sex. Financial education for kids who would inherit substantial capital was impeded by the well telegraphed impropriety of talking about money: “It simply wasn’t done.” A telling Norman Rockwell painting, still hanging in one of America’s august financial institutions, illustrates the most common financial ed session for young beneficiaries throughout most of the 20th century: time with the trust officer sent to ‘explain’ one’s trust fund.
The young man, hands tightly clenched, sits at taut attention while the family attorney communicates as much and as little as possible to someone who likely doesn’t know a bond from a stock and has no idea what the implications of said trust may mean for the future.
It’s not just concern about the stewardship of family capital that drives parents to seek instruction for their children, rather it’s a genuine desire to provide skills for economic self-defense; to imbue them with knowledge that will empower them and build confidence as they gain increasing access to significant resources.
Nonetheless, nearly half (48%) of these parents remain concerned about their children’s readiness to manage wealth. Why, if this many families are engaging some form of financial education for their children, are almost half of them concerned about the effectiveness of that effort?
It turns out that, as critical as financial education is in preparing young people for the opportunities and responsibilities of abundance, it is not the full solution. The missing puzzle piece is financial parenting— which cannot be outsourced.
Continue reading the rest of the article here.
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