CPA, CFP get need for early financial literacy, but can they effectively teach it?
Part 1: CPAs and CFPs get the need for early financial literacy.
Many individual CPAs and CFPs as well as their professional associations have excellent ideas on what and how to teach children about great money habits. Below are several examples demonstrating this point. I have also added some of my thoughts based on our 15 years of delivering early financial education programs to more than a quarter million children and families in 8 countries and nearly 40 states.
1. CPA Mobilization Kit: Parenthood: Teaching Your Children Money Management
- Parents can begin to teach children as young as two years old about saving money with a piggy bank.
- The connection that money can grow by saving it will come naturally.
- ENORMOUS congratulations to the American Institute of Certified Public Accountants (AICPA) on their forward thinking that includes a concrete step any parent can execute to take charge of shaping their child’s money mindset. When you compare and contrast it with what others share, it exemplifies extraordinary leadership. AICPA’s statement that parents can begin teaching children as young as two years old recognizes the environment both kids and parents are confronted with as well as research that indicates the prime and most consequential learning years are between birth and age 7.
Research and Reading:
- Penn State University: Can babies learn in utero?
- University of Cambridge: Adult money habits are set by age 7
- New York Times: How advertising targets children
- Sam X Renick: The future of children! Why financial literacy is tricky!
CPAs on Kids and Money
- Bobby Medlin: 3 Unique Ways to Teach Kids Money Lessons
- Cottrill Arbutina: Top 5 Things to Teach to Teach Kids About Money
- Ross Riskin: A Few Tips for Financial Success After College
2. Certified Financial Planner (CFP) – Let’s Make a Plan: Teach Your Children Well: Raising Financially Responsible Kids
- Lessons about financial responsibility must begin in the home
- The way parents or caretakers handle money, how they talk (or don’t talk) about it, and the emotions they express or exhibit around money all become inputs to children’s eventual relationship with money.
- First, think carefully about what financial responsibility would look like in your child
- Kids, as well as financially immature adults, tend to think about money one- dimensionally. They focus on what they can get with money, and not on what they may give up or risk in the process. Getting them to take a more balanced view, weighing benefits against costs, is an important foundational step that will serve them well into their future.
- The CFP Board also deserves praise from our perspective. This guidance is consistent with what we have learned in the field. I believe the second point, how parents talk about and handle money, lends partial insight into how kids develop money attitudes and habits far earlier than most realize. I also love the fact, the CFP Board advises us to begin with the end in mind as well as to weigh out our choices.
CFPs on Kids and Money
- Financial Families, Tim Hamilton: Financial Advisors on Kids and Great Money Habits
- Byron Moore: How to Teach Your Children About Money
- Paul Coan: 8 Important Things to Teach Your Child About Money
NEXT – PART 2: Are CPAs and CFPS effective at teaching kids about money?
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