Here's a tough truth for you parents: your college student or young adult probably doesn't know very much about money. I won't go into the detailed statistics, but the fact is financial literacy among young Americans is pretty awful. And I can speak from experience too: most of my friends still don't have a clue about money even now that they're making it.



Let's look at two facts: First, smart money management is essential to building wealth. Second, youth is the greatest wealth-building asset there is. Put the two together, and it's clear that a lack of money fundamentals today has a huge impact on wealth in the future.

There's no excuse not to educate our young adults about money, but most of our solutions aren't very effective. The answer is not to make personal finance classes mandatory in school (nobody remembers anything after finals) or offering free community workshops (who would go?). It's also not about making investing “cool” or using innovative technology.

Even sitting down and talking to your children, which I highly recommend, isn't consistently effective. I have a great relationship with my parents but tuned out whenever they started talking about money. It was just… boring.

The very best way for young people to become more educated about money is to learn from others that are just like them.

Sound simple? It's not. Money is a touchy subject that affects everybody in a different way. Many people love it, hate it, are embarrassed by it or jealous because of it. As a result, many people ignore the subject, thinking that personal finance is something that can be done “someday.” Which of course, almost always means “never.”

The simplest solution is in blogs and online communities that cater to young adults. That's why sites written by young authors, like MyMoneyBlog and GetRichSlowly have become so popular in a short period of time. Young people form communities around the sites and discuss their real, relevant stories. And by allowing many readers to participate anonymously, these sites make it easy to learn without fear of embarrassment.

As a parent, what should you do? Spend some time online at similar sites and find interesting content your child might find useful. Try blog articles or short e-books (longer books have too much irrelevant information and often don't get read). When you find something, email your son and daughter linking them to it. You don't need to explain it; they'll usually click through out of natural curiosity, at which point the words of the author do the rest.

This is a really effective way to get your kids interested in personal finance. By letting them feel like they've “stumbled upon” something interesting and useful, you won't make them feel awkward or defensive. If it didn't happen to me, I'd probably still be fumbling around like my friends instead of having great credit, and maxed out 401(k) and Roth IRA contributions. I was lucky, but luck shouldn't have anything to do with it. Getting your child interested in personal finance is one of the smartest and most important things you can do as a parent.