If you are under the age of 18 there is a 97% chance you are terrible with money. I actually made that statistic up just now but I can’t imagine it is that far-fetched. My school either taught me nothing about PF (personal finance) or I slept way too much in economics class. I’m pretty sure it was the first option though because I remember all the talk about widgets and profit margins etc. I have no recollection, however, of learning about compound interest, balancing a checkbook, credit scores, and passive income. Personal finance education is something that our schools need to embrace immediately. If children are our future then our future depends on it. And even if your kid isn’t one of the fake 97% they could still use some practical personal finance teaching, right?
Most people learn PF through the school of hard knocks. Either a credit card balance gets out of hand or you accidentally overdraw your checking account. Maybe you bought a home or car that you couldn’t afford. Then you spend the next 6 months to 12 years paying for that mistake. That sucks. Wouldn’t it have been nice if you had at least developed a greater understanding of the financial world you would be stepping into once you left high school? It might have motivated you to choose a cheaper college or grab a part time job to incur less loan debt.
I think so, which is why I propose that middle schools and high schools make a personal finance class MANDATORY for every student. No graduating and moving on unless you have learned about tax rates, car depreciation, and using a credit card wisely. Wouldn’t that make the whole world just a little bit easier to navigate? It certainly wouldn’t prevent these kids from growing up to trash their credit and make incredibly risky and life altering financial moves, but, it would alter the landscape of personal finance knowledge in our country. I have to imagine it would make a pretty big dent in the steel wall of financial illiteracy that plagues our citizens.
Since personal finance classes aren’t currently offered in a majority of school systems we as parents need to make sure our kids are properly equipped. Consumer expert Clark Howard wrote a book to help you teach your children about money complete with worksheets. Check something like that out and open up the conversation. Starting your kid out early with a great PF education could be the key to their future success.
The Consumer Financial Protection Bureau says, “Young people are not prepared to manage their finances when they reach adulthood. At the same time, the current financial services marketplace is increasingly complex. In the face of this very real need, American education should include approaches to teach young people about their finances. Part of that task starts at home. But young people spend the majority of their time in school. Therefore, it makes sense to offer financial education early and consistently throughout the K-12 school years.” I agree wholeheartedly.
I’ll step off my soapbox now. Just know that it bums me out that kids all over this nation are stumbling into credit card debt and ill-advised new car purchases without the benefit of a little financial training. Maybe we as grown-ups (or somewhere close to that) should speak up and teach our kids how to handle money well, and hopefully influence our local schools to shoulder a bit of the burden too. Just a thought.
What are you doing to make sure your kids know how to handle money in the future?