Why parents believe teens’ financial literacy isn’t their responsibility

They don’t see the immediate benefits of financial education and say that the subject should be handled by schools

Parents often defer the cost to give their teens financial education because they do not see the immediate benefit. Getty Images

Given our experiences with money, the mistakes we’ve made and what we wish we knew about money when we were younger, how is it that we parents aren’t up in arms?

How come we aren’t calling for decisive action to fix what we must know is a ticking time bomb? Why are we content to sit on the sidelines and wait for this to play out?

Especially when we know deep down that there isn’t any good way this can turn out. There are three reasons.

1. It’s in our blind spot

As parents, we have a number of blind spots when it comes to our teenagers, and their lack of know-how when it comes to money has to be one of the biggest.

We either don’t perceive it to be a problem, or if we do, we make light of it or proceed to brush it off as a phase that our teens will grow out of. We assume they will figure it out on their own.

We consider making money mistakes almost a rite of passage, something that can’t be helped, but because we don’t recognise it as a problem, we can’t begin to solve it. We remain passive even in the face of impending doom.

There is another related issue here, a psychological phenomenon called “inattentional blindness” where we fail to notice something because we are so focused on another task.

As a result of our singular focus, we miss out on important information that isn’t related to that task. As parents of teenagers, we are so focused on their test scores and college entrance exams, we easily fall prey to this.

We don’t notice their lack of understanding of money and how it works. And again, we can’t solve what we can’t see.

2. We pass on responsibility

We don’t take action to financially educate and empower our teens because we think this should be handled by schools and colleges.

We feel they would ostensibly be better and more effective at delivering this sort of knowledge than us parents.

With the high fees we pay for “innovative” and “state-of-the-art” education, we feel sure that our teenagers are being taught all they need to know about money. We skilfully pass this responsibility on and rest easy.

The problem is that the education system is equally good at this game. It throws the responsibility off, citing lack of time, funds and resources.

Their time, they feel, is better spent preparing teens for college entrance exams and ticking the boxes on all the government-mandated subjects.

Their funds aren’t enough to cover teaching an extra subject that isn’t part of the regular curriculum and isn’t government mandated to boot. They also don’t have teaching staff and operational resources to pull this off, they say.

They see personal finance as being firmly in the parental teaching domain and make an adept throwback to the parents.

With all these fantastic passes and throws being executed by the two stakeholders who have the most impact on the teenagers, the teenagers end up losing.

Because we parents continue to delude ourselves that this isn’t our responsibility, we aren’t making a move to play.

3. We’re out of mental bandwidth

We parents have too much on our plates. Between keeping our teenagers alive and well, fed and out of trouble and dealing with the elusive work-life balance, we don’t have much mental bandwidth left over for tending to teens’ financial educational needs.

This leads to “tunnelling”, which behavioural economist Sendhil Mullainathan and psychologist Eldar Shafir write about in their book, Scarcity: Why Having Too Little Means So Much.

A scarcity of time makes us put off important but non-urgent things, like writing a will or talking to our teens about money.

The two authors write: “Their costs are immediate, loom large, and are easy to defer, and their benefits fall outside the tunnel.”

There is a cost to getting our teens a financial education that we’d rather not think about and we can easily defer this because we don’t see the immediate benefits. This makes it easier to undervalue and leave out.

Remember our blind spot? We’re not absolutely convinced they need that education anyway. They seem to be doing just fine. Therefore, we wait to deal with this issue once we’re done with all the other urgent stuff, but we never seem to run out of the urgent stuff.

Suddenly, our teens are now off to college, or have started their first job and we still haven’t given them the crucial financial education they need.

These three reasons give us an insight into why we, as well-intentioned parents who want the best for our teenagers, sit on the sidelines when we should be the star players in the game.

Marilyn Pinto is founder of KFI Global