Financial security has great significance in our lives and learning to manage personal finances at an early age can provide a sound basis for the future. The best way to teach young children economic concepts such as saving, spending, and budgeting, is with the help of interactive methods. Using simple stories and activities can make it seem less like a lesson and more like fun. The use of cartoons and comic strips, games, and role play can help simplify things like balancing a checkbook, understanding interest rates, and managing debt (all concepts that California, New York, and certain other states do not seem to comprehend).
Why Teach Kids About Money?
The present generation is faced with numerous monetary challenges that were unknown to their parents and grandparents. The cost of a college education, buying a home, going on vacation, and retirement funding all require money. This is where financial education comes in handy. Often, parents who are not confident about their own skills in financial management may be reluctant to discuss this with their children. This makes it imperative that the younger generation be taught the different aspects of financial management in schools and colleges. Also, research has indicated that a vast majority of children in the United States consider themselves “entitled” and thus do not know the value of money. This has either came from Paris Hilton or because of a certain liberal philosophy that has warped the view of millions of Americans.
Financial Management in Schools
Many schools have made financial management a part of their curriculum in different ways. Some have introduced short courses such as the one in many Chicago schools which has students receiving a piggy bank at the end of the course. The piggy banks each have a slot for saving, spending, donating, and investing. Yet another course has students researching the salary for careers of their choice and then preparing life budgets accordingly. Then there are schools which give children the opportunity to run a bank in order to gain a better understanding of the financial system. Students learn about loan processing as well as using a credit card.
Four states in the United States—Utah, Missouri, Tennessee, and Virginia—have made personal finance courses a mandatory requirement for high school graduation. Besides these, 20 states have mandated that personal finance education be made a part of other subjects such as mathematics or home economics. The city of Chicago implemented financial education in its elementary schools four years ago. The city also plans to bring in a comprehensive K-12 financial education program soon. Appleton in Wisconsin is another example of a town which has introduced personal finance courses in its curriculum.
It looks like the real estate & financial crisis has perpetuated something positive.
Acquiring the right teachers for the job is important and seeing the dearth of qualified people in this field, some reputed institutes have invoked teacher’s training programs. The National Institute of Financial and Economic Literacy, located in Madison, WI, and Jumpstart, which is a coalition of organizations striving for the financial literacy of youngsters, offer training programs to teachers. A survey conducted by Charles Schwab indicates that a whopping 86 percent of students between the ages of 16 and 18 welcome the idea of learning financial management before they set foot in the real world.
What used to be taught at home is not being taught anymore and perhaps some things have become more complicated.
Pondering the Future
Organizations such as the U.S. Federal Reserve and the Federal Trade Commission, have also come up with various interesting tools to reach out to the younger audience. This has partly resulted from the fact that the U.S. national debt has crossed the $16 trillion mark which is a matter for concern, but apparently not President Obama and certain others in Congress because the over spending continues.
Parents and teachers can make use of these resources to teach their wards prudent handling of finances, money, savings, and contemplating their future (social security may not be around for them as it is for their grandparents). With the recession looming large and no relief in sight, it is pertinent that youngsters be taught the basics of personal finance at the earliest. It should be emphasized as much as science and English.