In the Wall Street Journal and then featured again on their terrific blog, The Juggle, there’s a great discussion about financial lessons children should learn. Here’s the list (see graphic) of 15 Money Rules parents should teach children.
These are terrific, and ones that big kids should (re)learn, too.
Millennials are a generation of young-adults raised during a time when the savings rate for households dipped below zero and where credit card debt spiked. Some young adults watched as their parents gambled on state lotteries or were taken for a ride by pay-day loan agencies separating the less savvy (or desperate) from their cash, while others learned terrible lessons about easy-credit as their families accepted promises of no down-payments on cars and homes luring even the wealthiest into spending beyond their means. Millennials were raised to consume-and consume on borrowed money if necessary.
So perhaps it’s no surprise that on the first day of the semester, in a self-help class I taught at the University of Iowa, the vast majority of students couldn’t define the word “thrift.”
After a few seconds of blank stares, I suggested that they had heard this word in conjunction with “thrift stores.”
“So thrift means vintage or used?” one student ventured.
Well, no. Not quite.
In part, this was simply a vocabulary issue — the students were certainly aware (if only in theory) of the concepts of moderation in spending, the necessity of saving and the idea that there are better and worse things to spend money on in any given scenario — but the fact that most of the 77 students could not define the word thrift underscores the problem: Millennilas haven’t been taught the thrift skills they need to be successful adults.
And just thinking about thrift in terms of spending and saving reduces an exciting term to mundane balance sheets. Thrift means disciplined use — of money, time, emotions, you name it. The root of the word thrift is “thrive,” meaning to grow and prosper. Thrift is the virtue of making smart choices and understanding the psychology of decision-making. And thrift is a learned skill.