April is National Financial Literacy Month. In the wake of the recent financial crisis, a greater emphasis has been placed on the need to educate consumers about personal finances so we can avoid the pitfalls that threw us into this unprecedented economic turmoil. Yet, credit card debt remains a national epidemic and personal savings rates are at an all-time low. According to the United States Commerce Department, personal savings are at a record low, just 3.7 percent. At the same time, we see that the average credit card debt per household is $15,956, according to calculations made from the Federal Reserve's February 2012 report on consumer credit. The key to building the next generation of fiscally responsible and financially healthy adults is educate and empower them before they get into this kind of trouble.
If children don't learn the principles of saving, spending and charitable giving at home, they don't learn it at all. Financial literacy is not taught in our schools and more importantly, parents need to impart their own personal financial values onto their children. Parents need to guide their children when it comes to how much they should save for a rainy day, when it's appropriate to reward yourself, and what's appropriate to give to charities and personal causes. These are questions I have struggled with for years in my dual role as an entrepreneur and a father.
Exacerbating this challenge is the fact that our children are growing up online, a place where real-world tangibles such as money, goods and services, even friends, are all virtual. As an Internet entrepreneur, I am a strong believer in the opportunities and advantages that the online world can provide for consumers. But we all have heard the stories -- or perhaps you have one of our own -- of a parent opening up a credit card bill to find hundreds of dollars in charges from iTunes or Amazon. Their child was playing with their iPhone and downloaded 30 apps and bought six books. Our children are growing up with a different playbook -- and set of rules -- than the one we were handed.
So how do we, as parents, start to instill good financial values in children? There are a few easy ways to start.
Responsibly using money is one of the most important things we learn in our lifetime, and yet it's a lesson too few of us take the time to teach our kids. It may even be something we haven't taken the time to learn ourselves. But it's never too late to start. Now, more than ever, we have access to wonderful resources that can help make these lessons easier to learn, and easy to teach others. We simply cannot let the next generation experience the pitfalls, dangers, and challenges that we've unfortunately had to go through due to a lack of education. We have the means; parents must now find the way.