Kids aren't getting much in the way of financial education at school, and if parents don't step up, they're going to get even less in the summer.
According to a white paper put together by the Consumer Financial Protection Bureau, just 22 states require high school students to complete an economics course before graduation, and just 13 require any kind of personal finance schooling. That's leaving a lot of kids unprepared to make basic financial decisions when they reach adulthood.
"We have not taken a position on whether [personal finances courses] should be mandatory, but we know teachers think it should be taught in schools," says Gail Hillebrand, the CFPB's director of consumer education and engagement.
But even if it became a mandatory high school class across the country, it still wouldn't be enough -- Hillebrand says that starting personal finance education in high school is too late. So with summer upon us, we suggest parents of tweens and teens take the reins and start teaching their kids about money.
There are a lot of ways to go about this. One is a summer job and a bank account, which should hopefully impart the importance of saving part of a paycheck. Another, more expensive strategy is to ship your kids off to one of several financial literacy summer camps.
But if summer jobs are hard to come by and you can't afford to send your 12-year-old to investing camp, there's an easier way to impart some basic financial lessons: Take your kids back-to-school shopping.
"I think if you can bring this down to needs and wants, then maybe that's the way to break it down for middle school kids," says Michael Eisenberg, a Los Angeles CPA. "What is it you need to have for school, and what is it that you want to have for school?"
Andrew Corrado, a senior vice president at Capital One and an active financial literacy mentor, echoes the notion that back-to-school shopping can be a good way to teach the basic budgetary concept of needs versus wants.
"As an adult, you have opportunity to sit down and say 'We're going to build a budget your back-to-school shopping," he says. He recommends that you allocate a fixed amount of money to your children's shopping budget, and then work together to figure out what they can and can't buy with it.
Both experts agree that middle school is a good time to start working with your children in this way, and both also say that it should be a guided process.
"I would have them go online, do comparison shopping and present to me what they want to buy," says Corrado. "I would never set them out at that age to make purchases on their own."
But that comparison-shopping experience can be even more educational than a solo trip to the mall. For kids used to having their parents buy them everything, it can be an enlightening experience to learn that shopping around and using some basic price-comparison tools can make your budget go further than expected.
Solo shopping trips and lessons in credit management may still be a few years off. But it's never too early to turn your kid into a penny-wise, budget-conscious shopper.
Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.