Joline Godfrey: Financial Education Is Not JUST About Money

Raising Financially Fit KidsJoline Godfrey, CEO of Independent Means, is also the author of four books on financial education. Independent Means is one of the leading financial education firms in the world.

I was lucky enough to be able to speak with Joline about the new edition of Raising Financially Fit Kids, the business of financial education and her approach in the context of families. If you are interested in purchasing her book, please visit the College CFO Store.

What revelations have you had about young peoples’ financial education since the first edition of Raising Financially Fit Kids?

One of the main changes in this edition is the inclusion of a chapter that deals with college students and twenty-somethings. Cash flow management is a critical skill for young people who are expected to adapt to independence after leaving the  shelter of their parents’  ‘invisible subsidies’. Kids are often sent off to college having practiced their tennis swing, piano lessons, and a second or third language.  But few have actually practiced cash flow management or allocating budgets. Yet families get frustrated when their kids are over-extended or don’t seem to appreciate the ‘value of a dollar.”  Financial education has typically been an after thought in most families. Happily, the families we work with understand that financial education requires at least as much attention as clarinet lessons!  And unless they’ve been intentionally educated about basic financial skills like cash flow management, investing, and philanthropy, they risk having long term trouble with money.

In my view, there are three elements of financial fluency: context, skills and practice. Our role as parents and mentors is to help this next generation be mindful of their goals and values: what do they want to do? What is important to them? How will they finance their goals and values? Once they’ve addressed these questions, the skills they master will be grounded in context and relevancy. And while the first two steps are important, practice is key. There is an unrealistic expectation that college students will just ‘pick up’ these skills when they are thrown into the real world. It’s not a quick process and it requires just as much practice as learning to play a sport or master a musical instrument. This is why we urge families to start young. Expecting a financially immature kids to go off to college and master cash flow is unrealistic. When they max out credit cards and have repeated overdrafts they are exhibiting lack of instruction and practice–not just a lack of responsibility. No one expects a young person to play championship level tennis at Wimbledon without real instruction and practice. But when it comes to financial skills–we have unrealistic expectations about what kids young people will absorb ‘on their own’.

What advice can you give to college students about financial fluency?

First, don’t be too hard on yourself if you are not good at cash flow management right away–but get a mentor and get some practice. Fiscal skills open many other doors. Don’t let yourself off the hook with ‘I don’t know how”. Treat this the way you would try to learn a new sport or an instrument: BE INTENTIONAL about it. Practice. One way to get better of course is to mentor a younger siblings. You can also encourage them to seek out opportunities to learn about finance. Independent Means Inc. hosts a program for 14-18 year olds called Camp Start Up that’s a great example of this. At Camp Start Up, teenagers practice financial skills in teams as they create their own businesses. And for the older student (meaning anyone between 20 and 70!)--Learning Labs for Financial Creatives is another opportunity to acquire financial competency.

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