Think you’re smart about your money? Think again!

Jul 1, 2019, 1:19 PM

SALT LAKE CITY -- Expungment fees are going up in Utah. Before July 1, if you were eligible to expu...

SALT LAKE CITY — A new report out says that Americans are too arrogant about their financial knowledge.

Nearly three-quarters of American adults gave themselves a “high” rating regarding how much they know about general finance topics like diversification, compound interest, and inflation, according to the report from the FINRA Investor Education Foundation.

The test results told a different story. Only 40% of the participants given the six question quiz were able to answer at least 4/6 questions correctly, and just 7% answered all of the questions correct.

The biggest slip-ups came when the participants were asked about how compound interest affected their money.

Compound interest is something that billionaire investor Warren Buffet says is part of the secret to his wealth.

“My wealth has come from a combination of living in America, some lucky genes, and compound interest.”

What about money and your kids?

You’ve said it plenty of times to your kids, we’re sure: “Money doesn’t grow on trees,” but that shouldn’t be the only money advice you should be giving your kids.

So what should you teach your kids in a way that sticks to help them become financially independent and smart with their money?

Business reporter Nicole Spector broke down a few good lessons with personal finance expert Rachel Cruze in an article from NBC News. Those lessons include:

Money doesn’t grow on trees

If that’s what you’ve been saying, you’ve already got the first step down. Cruze says it’s important to teach your kids that money doesn’t just come from mom and dad’s wallet, but that it requires work.

“When you work, you get paid. When you don’t, you don’t get paid,” she emphasized.

Helping your children understand the relationship between work and money is something that helps them understand the value of a hard-earned dollar, Cruze said.

Give, save, spend

After making that connection between work and money, the next step, according to Cruze, is to help them set up worthwhile habits in their relationship with money.

Cruze suggests a hierarchy in the way kids can be responsible with their money: giving, saving and spending.

Giving your kids a safe place to learn and grow is key to helping them succeed in the future, she adds. Parents should show kids how their dollar can help others through giving, or how sad it is when they run out; according to Cruze, those experiences can be great teaching opportunities.

Make them a part of the discussion

Demystifying the green paper with dead presidents on them is something that can be immensely helpful in shaping the way that kids will think about money in the future, Cruze said. Her advice: involve them in discussions about the family budget. Have them help search for coupons. Help them understand that there is more to money than the little piece of plastic in your wallet. In Cruze’s view, having experiences can be more powerful than having a lecture.

Hear more about this discussion and what you can do to help your kids learn about money, along with prolonging the life of your car on the Dave and Dujanovic podcast.

Dave & Dujanovic can be heard weekdays from 9 a.m. to noon on KSL Newsradio. Users can find the show on the KSL Newsradio website and app, as well as Apple Podcasts and Google Play.

Listen on Google Play Music

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

All News

The New Intermountain Primary Children’s Hospital, Miller Family Campus, in Lehi is dedicated at ...

Heather Peterson

One third of Utah hospitals not in compliance with hospital price transparency law

Hospitals have been required to post a list of the prices they charge for services since January 1, 2021.

2 hours ago

Noah Pirkle snowshoes by the Mill B trailhead in Big Cottonwood Canyon on Monday, Jan. 15, 2024....

Carter Williams

Comparing Utah’s snowpack this winter with the rest of the West

Utah's mountains gained 12.9 inches of snow water equivalent, otherwise known as snowpack, between the season start on Dec. 1 to its end on Thursday

3 hours ago

Cookie Monster has taken to X to express his frustration over shrinking products, aka: "shrinkflati...

Bryan Mena

Even Cookie Monster is complaining about the US economy

“Me hate shrinkflation! Me cookies are getting smaller,” Cookie Monster posted on X. “Guess me going to have to eat double da cookies!”

4 hours ago

Macy Schmidt, the founder of The Sinfonietta, conducts the group....

Mariah Maynes

Barbie The Movie: In Concert features all-women orchestra, coming to Utah

"Barbie the Movie: In Concert" features an all women orchestra. And the film featured an all-women team of production and tech professionals.

4 hours ago

Thousands of pounds of Trader Joe's chicken soup dumplings have been recalled due to possible conta...

Jamie Gumbrecht, CNN

Trader Joe’s chicken soup dumplings recalled for possible contamination

The manufacturer, CJ Foods Manufacturing Beaumont Corporation, said customers found hard plastic in the dumplings. 

5 hours ago


Becky Bruce

South Jordan still cleaning up after tumbleweed take over

The invasive and non-native tumbleweeds blew into South Jordan on Saturday, blocking streets, driveways and even entire homes. 

5 hours ago

Sponsored Articles

Mother and cute toddler child in a little fancy wooden cottage, reading a book, drinking tea and en...

Visit Bear Lake

How to find the best winter lodging in Bear Lake, Utah

Winter lodging in Bear Lake can be more limited than in the summer, but with some careful planning you can easily book your next winter trip.

Happy family in winter clothing at the ski resort, winter time, watching at mountains in front of t...

Visit Bear Lake

Ski more for less: Affordable ski resorts near Bear Lake, Utah

Plan your perfect ski getaway in Bear Lake this winter, with pristine slopes, affordable tickets, and breathtaking scenery.

front of the Butch Cassidy museum with a man in a cowboy hat standing in the doorway...

Bear Lake Convention and Visitors Bureau

Looking Back: The History of Bear Lake

The history of Bear Lake is full of fascinating stories. At over 250,000 years old, the lake has seen generations of people visit its shores.

silhouette of a family looking over a lake with a bird in the top corner flying...

Bear Lake Convention and Visitors Bureau

8 Fun Activities To Do in Bear Lake Without Getting in the Water

Bear Lake offers plenty of activities for the whole family to enjoy without having to get in the water. Catch 8 of our favorite activities.

Wellsville Mountains in the spring with a pond in the foreground...

Wasatch Property Management

Advantages of Renting Over Owning a Home

Renting allows you to enjoy luxury amenities and low maintenance without the long-term commitment and responsibilities of owning a home.

Clouds over a red rock vista in Hurricane, Utah...

Wasatch Property Management

Why Southern Utah is a Retirement Paradise

Retirement in southern Utah offers plenty of cultural and recreational opportunities. Find out all that this region has to offer.

Think you’re smart about your money? Think again!