My wife had a college roommate whose idea of money management sounds like the
punch line to a joke. This roommate believed that her money never could
run out, as long as she had checks in her checkbook. As a result, she
bounced about a dozen checks within a two-month period. But even as the bank
hounded her, she still didn't understand why she was in trouble. According to my wife, her response remained, "I still have checks. What do you
mean I don't have any money?"Seems to me the girl's parents should
have spent a little more time explaining financial realities to their daughter
before sending her off to school.And according to a new survey, they
are not alone.The Charles Schwab 2008 "Parents & Money Survey"
found that 57 percent of parents with teenage children wish they had learned
more about money management when they were teens. But many of those parents
admit their children may someday share the same regret.The online
survey of 1,000 American parents with teens between the ages of 13 and 18,
conducted for Schwab by Kelton Research, showed that 60 percent of parents
identify their teens as "quick spenders." But only 34 percent of parents
surveyed have taught their teens how to balance a checkbook, and only 29 percent
have taught them how credit-card interest and fees work.That's amazing
to me. It's probably appropriate to mention on Mother's Day that I remember my
mom teaching me to balance a checkbook. As I have written before, it's a lesson
I learned so well that I balance our family checkbook right away when our
monthly statement comes, prompting teasing from my wife that doing so must be
one of my favorite leisure activities.But let's get back to the issue
at hand.The Schwab survey showed that 71 percent of parents think the
best way for teens to learn about money is from guided, hands-on experience or
from a parent's example, but few involve their teens in family budgeting and
spending decisions.In fact, the survey said parents were more likely
to teach their teens how to do laundry (70 percent) and how to cook (68 percent)
than how to regularly save money (54 percent), how to budget money (49 percent)
and how to pay bills (43 percent).I'm not saying those other skills
aren't important. I'm certainly glad my mother-in-law taught my wife how to
cook, and my waistline shows that she learned those lessons well.However, I agree with the premise of this survey. Schools do an excellent job
giving children a basic education, and they have tried recently to add more
financial education to their mix. But the best place for children to learn money
management is in the home.The Schwab survey showed that 93 percent of
American parents worry their teens might make financial missteps, such as living
beyond their means (67 percent), getting in over their heads with credit-card
debt (65 percent), failing to save for emergencies (60 percent) or failing to
stick to a budget (57 percent).I reckon many parents struggle with the
same things, so it's no wonder we're so worried. But instead of wringing our
hands, we parents need to first hone our own financial skills, then take the
time to explain money management to our kids.Hopefully the Schwab
survey results, though not all that surprising, can remind us of this
responsibility.After all, the survey said 33 percent of parents
anticipate that their "golden years" will include helping their children
financially. If we, as parents, set a good enough example, maybe we can turn
that statistic around.I know I'd love to have my financially
successful children send me and my wife on an extended vacation to Hawaii or
Europe — or both — someday.But if we don't do a good enough job of
teaching them now, they might be justified in making that a one-way trip.