Defining Economic Literacy vs Financial Literacy

Are your kids economically literate? This is a question that James has been asking himself lately. Do they understand economics? It's critical to comprehend economics for everyone's future success. James is going to talk about why being economically literate matters and how to become economically literate.

There is so much negative information being put out there about our economy. James isn't afraid because he understands how our incredible economy works. This episode is about making our kids economically literate so that they will be less susceptible to the influence of negative news and predictions about our economy. The more knowledge our kids have, the less fear they will have!

Episode Highlights:

[03:53] James is a huge believer in understanding how finances work. He teaches kids financial literacy through the bank of mom and dad.

[04:20] As parents, we need our kids to understand how money works.

[05:01] With all of the current news about the economy, it's more important than ever for kids to be economically literate. We are constantly being bombarded with threats and worries about the future of our economy.

[05:38] By understanding the terms, you can have a more balanced reaction towards all the fear being thrown at you.

[06:32] Our incredible economy has self-governing systems embedded in it already. The more knowledge you have, the less fear you will accept.

[07:30] We need to set our kids up to be economically literate, so they aren't as afraid.

[08:11] Kids grow in economic literacy the same way they grow in financial literacy and that is through exposure.

[09:49] Conversations about income taxes can help with fears about tax rates going up. Parents also need economic literacy to help with their own fear.

[10:47] In the past 22 years, there have been so many different changes in the tax code. The actual impact of these changes has only been about 1%.

[12:09] One thing we can have confidence in is that things haven't really changed that much from a tax standpoint. The rules have changed a ton.

[13:05] Being economically literate is understanding what inflation is. In our last 10 years prices have only gone up about 30%. In the grand scheme of things, it's right on trend. Being economically literate buys confidence and stability.

[14:53] Different people have different economic circumstances, and it's good to be exposed to everyone. Understanding poverty and being exposed to people in those situations is also part of economic literacy.

[16:12] James is passionate about kids having a framework to understand economics and the current state of our economy. Economics should be a required course. People should understand supply and demand, economics, and everything that goes into our incredible system.

[17:20] Are you economically literate enough to have these conversations with your kids? Ask questions about what people are afraid of.

Resources & Links Related to this Episode

• Wealthquest Get Started
• Living a Rich Life: The No-Regrets Guide to Building and Spending Wealth
• Episode 4 // Teaching Kids About Money By Letting Them Fail
• Register for the Advanced Estate Planning Webinar on October 20th
• The Psychology Of Money: Timeless Lessons On Wealth, Greed, And Happiness
• Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions