My Early Money Lessons with Life-Long Impact

April 24, 2024 Cindy Scott
One of the greatest gifts a parent can give their children is a foundation of financial wellness. Gather your kids around the kitchen table and start talking about money.

When I was a kid, I would ask my dad for "stuff"—things like a Cabbage Patch doll, a new bike, or designer jeans. When I was about 10 years old, he explained to me, "We need to cover the necessities first, and then we can see what's left over." From then on, any Saturday morning we weren't fishing, I would sit at the kitchen table with him and help him pay the bills.

I learned that you go to work, earn a paycheck, and then you take care of your financial obligations right away. I saw first-hand that you had to pay the mortgage, pay the utility bills, put some away for the future, and then we could figure out what was left over to spend on extras.

This Saturday morning routine at my kitchen table was the genesis of my financial education and helped me to distinguish between "needs" and "wants." My dad taught me how important it was to pay bills on time, how to write a check, and how to balance a checkbook.

I am so thankful for my dad and these early financial lessons he taught me. Never in my adult life did I have to reach back to my parents and ask for money. Never. I've experienced financial stability as an adult because I learned the importance of spending within your means, budgeting, saving, and planning when I was young.

The cost of financial illiteracy is high.

While I was fortunate to learn about money early, many Americans suffer because of financial illiteracy that spans across income levels and age.

The lack of money knowledge can open the door to costly financial mistakes like credit card interest, late fees or overdraft fees, or worse.

  • 62% of Americans live paycheck to paycheck.1
  • 57% of Americans don't have enough savings to cover a $1,000 emergency expense.2
  • 64 million Americans have debt in collections.3

In 2023, a lack of money knowledge cost Americans an average $1,506, according to the National Financial Educators Council.

Financial education in schools is expanding, but…

While some progress has been made with financial education in the schools, there's more work to be done. Today, 30 states require students to take a personal finance course to graduate from high school. Yet in only 16 of those states, the requirement is for a stand-alone personal finance course, as opposed to work embedded in other coursework, according to the Council for Economic Education.

I was fortunate to have an elementary school teacher who was a trailblazer in her day.

My sixth-grade teacher created a banking game that helped teach delayed gratification.

Decades ago, Mrs. Scroggins at Meadow Park Elementary School in North Little Rock, Arkansas, created a game where each week, we'd get an allowance of fake money. You could use your "allowance" to pay for things like a hall pass outside of scheduled break times, extra time at the gaming station, or spending money at a weekly auction we had on Fridays.

Some kids would spend their entire allowance on extra gaming time. But that wasn't my priority. I planned ahead for the weekly auction. On Friday, all the kids would bring in snacks that I loved like potato chips, sodas, and other treats, and we bid on them. I saved my money because I knew there was a big reward at the end of the week. I always came home loaded with items I bought at auction because I prioritized and planned, and I didn't spend on my lower priority items throughout the week. It was a special treat for my siblings, my cousins, and even friends from the neighborhood who would visit over the weekend.

A stock market game in college helped teach me about wealth building.

Fast forward to college. We played a stock market game in one of my business classes. Each student received a fictitious $10,000 that we could invest. We picked stocks and tracked their progress. At the end of the semester, some people lost money, some people made money.

Through that game, I learned that owning stocks is a way to build wealth and gain financial independence. It was also my first introduction to diversification because I saw that the people who did better picked a variety of stocks, versus those who picked just one or two stocks.

This is also when I discovered that I wanted to be a financial advisor and help other people with their finances. In my life, I knew people who were doing well financially and others who were struggling. I wanted to be in a position to help others succeed financially.

How my early financial education changed my life.

These early money lessons saved me from unnecessary debt and financial struggle, and they gave me a sense of confidence that I could stand on my own two feet and be independent as I became an adult. I am so thankful for my dad and these classes. I credit them for my financial stability today. Not only did I learn core money lessons like budgeting and how the stock market can help build wealth, I saw a path to experience financial success as an adult.

Gather your kids around the kitchen table and start talking about money.

One of the greatest gifts a parent can give their children is a foundation of financial wellness. When I was a kid asking for this and that, my dad didn't say no. He said, "Let's sit down, and I'll show you how money works." Kids need that.

I am doing this with my nieces and nephews now. I opened a custodial account for each of them and let them choose fractional shares. They chose stocks like Nike, Microsoft, and Netflix, companies with products they know. It shows them in a tangible way how they can begin to build wealth by investing in companies and gaining a small piece of ownership.

Last but not least, it's never too late to build or refresh your own money skills. Add at least one good book on personal finance or investing to your reading list, and explore the free financial education resources available at Schwab Moneywise®.

We can all work together to help improve financial literacy for the young people in our lives.

Here's how Charles Schwab Foundation is helping.

For decades, Charles Schwab Foundation has partnered with leading nonprofits and community organizations to empower Americans with financial education, reaching tens of thousands of teens and young adults each year. Here are just a few ways we help.

  • More than 20 years ago, we launched our financial literacy commitment with Boys & Girls Clubs of America (BGCA) to teach teens critical money management skills, while also equipping them with the decision-making confidence to achieve financial well-being and lifelong success. So far, more than 1.1 million teens have gone through the program.
  • Over the years our commitment has grown, and we now work with four of the nation’s leading youth development nonprofit organizations including Girl Scouts of the USA, 4-H, and Junior Achievement—as well as BGCA—to help give more kids the critical financial skills they need to achieve brighter futures.
  • Schwab has also partnered with the SIFMA Foundation for six years to support the Capitol Hill Challenge, a 14-week financial education and stock market competition, by fully funding participation for low-income schools in every state each year.
  • Our Moneywise America™ program harnesses Schwab's financial expertise alongside the talents of our 30,000+ employees to provide high-quality financial education to teens across the country, with a focus on those from under-resourced communities and schools.

Learn more about how Charles Schwab Foundation invests in financial well-being for all.

1 2023 Lending Club report

2 Bankrate 2024 emergency savings report

3 Urban Institute

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.