Disaster,  Rebuilding

Are your kids financially literate?

I had to explain bankruptcy to my boy yesterday. I mentioned to him that Tony had a job interview, and he said something like, “That would help a lot of things.” Without really thinking about it I said “Yes, it could even bring us back from the edge of bankruptcy,” so he asked me about bankruptcy and what it means.

So on the way home from work and school, I gave him a quick overview of Chapter 7 and Chapter 13, and said that we know some other people who have been through it, including several friends and one of my sisters. It wasn’t a secret that we were considering it, but after I explained it to him he asked why we hadn’t told him before. I said that despite the shitty economy and the record number of consumers who are entering into bankruptcy every month (up 24% last year, according to the U.S. Courts), there’s still some social stigma attached to it that makes people not want to talk about it very much. He seemed to get that, but I think he felt like he was being kept out of the loop.

I have mixed feelings about this. On one hand, even though he’s 17 and taller than me, I want to protect my child from the harsh realities of the big cold world for as long as I can. On the other hand, my parents never talked about money, either to us kids or in front of us, and I think that’s at least partly why my sisters and I suck at handling money and planning for the future. I’ve talked with my mom about it as an adult, and she acknowledged that not teaching us to handle money responsibly was a mistake on her part. As she was growing up, her parents didn’t talk with the kids about money, because back in the 1940s it just wasn’t done. People were so busy recovering from the Great Depression and heading into the Baby Boom that maybe it didn’t seem important.

Now, however, I can’t think of a more important thing to teach my boy, who could potentially be out on his own a year from now. Goodness knows they aren’t teaching financial literacy in high school, which I think is a major disservice to teenagers, but that’s a whole other rant. Ever since he was five, I’ve been consistent about teaching him to cook basic food, shop for groceries, do his own laundry, and generally keep things clean, but we haven’t even really talked about how to build a savings account, pay bills, or prepare taxes. He gets a small allowance, so saving a percentage of that might be a good place to begin. I also want to teach him about the evils of credit cards, before he gets sucked in and buried by his own debt in college.

Do you talk to your kids about money and credit? How about foreclosure and bankruptcy? Where do you draw the line, and when do you start?


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