Are you a parent that’s worried about sending your child out into the real world? You should be. According to the often-cited PISA 2015 Financial Literacy assessment, about 1 in 5 children in the U.S. don’t meet baseline levels for financial literacy proficiency. This can include creating and following a budget, finding affordable housing, or paying off student debt. It is essential that students educate themselves o these aspects because students who are required to take personal finance courses have better average credit scores and lower debt delinquency rates as young adults, according to data from the Financial Industry Regulatory Authority’s Investor Education Foundation, which seeks to promote financial literacy.

“It’s about everyday teachable moments, starting early and covering all of the topics.”

-Stuart Ritter, T. Rowe Price

A new parents, kids & money survey from T. Rowe Price also concluded that young adults that received a financial education are also more likely to have better saving habits compared to those who did not. However, parents cannot not just rely on schools to teach their kids everything they need to know about finance. Financial education varies dramatically from state to state, and a survey from the Council for Economic Education found that the number of states requiring a course in personal finance was only 17.

What this means is that parents have to fill in the gaps if they want their kids to be financial aware. Another alternative is that there are now schools specifically for adults, which aim to teach basic money management as well as other life hacks, such as how to fold a fitted sheet or open a bottle of wine without a corkscrew.

Young adults that discuss money with their parents are also much more likely to have a budget, an emergency fund, better saving habits, and a retirement account according to T. Rowe Price. However, when it comes to adulthood, around 2 two-thirds of people from the ages 18-24 felt unprepared to deal with real-world finances. “Adulting may be a bigger challenge for those who didn’t receive any financial education at school or home as kids since they’re less likely to have a budget, an emergency fund and retirement savings,” said Stuart Ritter, a senior financial planner at T. Rowe Price and the father of three. In addition, “the decisions about retirement savings and health-care plans that young adults need to make have gotten more complex,” he said.

Ensuring that your children are financially knowledgeable should not just be one brief talk before they go off to college. It’s about everyday teachable moments, starting early and covering all of the topics. “We are talking to our kids about the dangers of illegal drugs long before they are facing those situations,” Ritter said, “personal finance should be the same way.” It’s crucial that young adults are aware about finance in order for them to have a successful financial future!

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