Parenting is not easy. Most parents who work 2-3 jobs so they can pay the bills, save for retirement, and stay insured do not have the time to hand out personal finance lessons to their children. If you have been unfortunate not to have learned basic life lessons from your parents, you need to stop feeling sorry for yourself and learn (and also teach others!) the fundamental principles of personal finance.
Here Are the 5 Things Your Parents Never Taught You About Money
1) How to Create a Sensible Budget
Most parents (belonging to lower-middle and middle class) do not want their children to feel like they have financial constraints. They feel, revealing their real financial situation will make their children think they belong to a poor family–which in turn would make them feel less respected by their children. Consequently, most parents don’t reveal their real resources– and the children never get a chance to learn how to create a sensible budget.
2) How to Build an Emergency Fund
Most parents do not teach their children how to create a proper emergency fund. An emergency fund is a financial safety net that protects you in case of a catastrophic life event or unexpected expenses. Building a solid emergency fund liberates you from relying on your friends and family to bail you out when in trouble. Parents who want to want to feel needed (for emotional reasons) might not teach their children how to build an emergency fund.
3) How to Use Credit Cards
I understand that there are certain dangers of using a credit card at an early age. It may not be a wise decision to hand a postpaid credit card to a child or a teenager. But there are several credit card companies offering prepaid credit cards for young people, so they can learn to manage money from the get-go and also, more importantly, begin building a credit history.
4) A College Degree Does Not Guarantee a Good Job
Most parents do not tell their kids how difficult it is to get a job (after graduation). They also hide the fact that the current job market is competitive and merely having a college degree is not enough to survive. You also need other life skills. Parents do not want their children to get discouraged at an early age. Hence they want their children to live happily believing that a college degree would easily get them a job.
5) Parent Don’t Tell You That the World Has Changed and the Easy Days Are Over
A few decades from now, things were a lot different. Whether you have a college degree or not, you could easily get a decent job, save for retirement, and also rely on the pension. Not to mention, how secure government-funded retirement accounts were–back in the days. At present, the things that worked before are no longer relevant. Parents do not keep their children updated for the same reason–they want you to be happy and carefree.
These are the 5 things about money most parents do not want their children to know. Realizing them now (assuming you are above 18 years of age) may be tough. You might also have to learn things from scratch. But it’s never too late to learn about money.