The Value of Preparing Our Children for a Stable Financial Future and Building Generational Wealth
While over 72% of parents want to improve their financial knowledge, many face challenges in complex areas such as managing debt
Parents play a crucial role in our children's financial education. Crédito: Mark Lennihan | AP
Financial education is an essential skill for success, and parents in the United States play a key role in shaping their children’s financial literacy. A recent study by Wise shows that parents give their children over 100 financial tips per year, but these tips often fall short of making the desired impact on young people.
The study also highlighted that while over 72% of parents want to improve their financial knowledge, many face challenges in complex areas such as managing debt or understanding international finances.
Where is Confidence Lacking, and How Can We Improve It?
In states like California, Texas, New York, and Florida, the results show a mixed picture: parents in Texas and New York report around 70% confidence when discussing basic financial topics, while in California and Florida, confidence is lower, especially in areas like understanding debt—25% in California and 24% in Florida—and credit scores, with only 15% in Florida.
This underscores the importance of accessible and tailored resources for these communities. Most parents want to improve their knowledge in these areas to provide more effective support to their children. This includes not only national topics but also money management in an international context, which is particularly relevant for families sending remittances.
The Role of Remittances, Transparency, and Financial Education
Remittances play an important role in the lives of many Hispanic families in the United States, as sending money abroad is a crucial source of support for their loved ones back home.
However, the costs associated with these transfers often include hidden fees that can significantly increase the final price of each remittance. A study commissioned by Wise and conducted by Capital Economics found that since 2018, foreign exchange transaction fees in the United States have risen by 41%, from $8.6 billion to $12.1 billion. According to the report, this resulted in $5.8 billion lost to hidden exchange rate fees for Americans.
These costs are not always clear, and many parents express a lack of confidence when offering advice on international finance topics. In fact, the research revealed that only 14% of parents feel confident discussing sending money abroad with their children, and only 11% feel secure explaining currency conversion.
Interestingly, in states like Texas and New York, parental confidence in this area is slightly higher than the national average—21% and 17%, respectively—which may be related to the large number of families who regularly send remittances and seek to optimize their transfers. This demonstrates that, despite low confidence levels, there is a growing interest in learning about global finance.
Given the critical role parents play in their children’s financial education, they can take some practical steps to make every piece of advice count:
Involve Children in Real Financial Decisions: A great way to encourage active listening is to have young people participate in family financial decisions, such as creating a family budget or choosing a savings option.
Learn Together About International Finance: Use children’s natural curiosity to teach them about remittances, currency exchange, hidden fees, reading the fine print, and finding providers that communicate their fees transparently—empowering them in the process.
Encourage Continuous Learning: The study shows that 79% of parents are open to using new tools to improve their financial knowledge, which could include online education platforms or free community courses. Leading by example is always effective: every step a parent takes to improve their own financial literacy is a valuable lesson they can pass on to their children.
As parents, we play a crucial role in our children’s financial education. As financial challenges grow, we can strengthen their skills and knowledge to better guide them. With available tools and resources, we not only improve financial management at home but also provide them with a solid foundation to face the future.
(*) Joshua Contreras, Senior Policy and Campaigns Officer at Wise.
The texts published in this section are the authors’ sole responsibility, and La Opinión assumes no responsibility for them.
