Thankfully business and finance is now part of the school curriculum, but I remember when I was at school (and it wasn’t that long ago) that home economics was based on baking cakes and cookies, rather than managing the household budget.
More and more, young people fall into debt before they are 21 years old. If they have attended university, by this point of their lives they have accrued thousands of pounds worth of debt in university fees, student loans and bank credit. If not, it is still likely that they have bills from maintaining mobile phones and if they are very lucky purchasing and running a car.
This means that they are already starting their adult lives at a disadvantage, and for many this can be the tip of the iceberg as access to credit and the opportunity to create liabilities has become easier than it has ever been before.
The educational system has improved, but it is not solving this problem. Therefore the only reference point for managing money for many children is their parents, and if parents don’t explain and teach the children, it’s likely that they will do what they see.
For parents who save regularly, investor regularly and have a good balance between their assets and liabilities, this bodes well. However for those struggling financially and accruing debt it is likely that this is the lesson that is being taught. Children rarely see or understand all that goes behind running a house and managing the budget, so if you are saying nothing; your actions are telling everything.
If you are yet to read, ‘Rich Dad, Poor Dad’ by Robert Kiyosaki and Sharon Lechter, I would strongly recommend it.