We live in a time when teaching financial responsibility to kids is increasingly important. The recent economic crisis has showed us that many adults aren’t financially savvy either. Teaching children about finances from a young age would help them be better prepared to face economic crises as adults.
I’m sure no one will argue that personal financial knowledge is vital to kids growing up to be successful adults, but there’s much debate on who should teach them such skills. Some argue that parents should teach kids based on their family’s values and resources – but the problem with this is that many parents don’t have much financial knowledge to pass on to kids, especially those from families with lower incomes and more debt. These kids are more likely to be stuck in a cycle of poor money management because they don’t have the resources to get out of it, whereas children from wealthier families may be more likely to learn about their 401k.
For these reasons, personal financial management lessons should be taught in schools. English, math, and science are core subjects – why shouldn’t financial management be? It’s a skill kids would use through their entire adult life, and is just as important as reading and writing. Teaching these skills in school ensures that all kids have an equal opportunity to learn about finances, regardless of their family’s financial background – thus giving all children a chance to break their parents’ cycle of poor money management.
In Chicago, some elementary schools are now offering a financial management course for third graders. The 8-week program, taught during students’ library period, teaches the four pillars of finance: saving, spending, donating, and investing. At the end of the course, each student receives a piggy bank, called the Money Savvy Pig , which has four slots – one each for saving, spending, donating, and investing.
Wisconsin is one of four states now requiring students to take a personal finance management course to graduate from high school. Students pick an occupation they’re interested in, research the salary, then learn life budgeting skills based on the salary they’d earn in that position. Their “textbooks” are sites like Yahoo! Finance and Money.com.
But do these courses work? In Chicago, the elementary students showed a better understanding of the stock market and other financial concepts. I haven’t been able to find data on the effectiveness of the Wisconsin course, but I would theorize that teaching finance to younger kids – and reinforcing it for the rest of their years in school through games, financial word problems, and more complex lessons as they get older – would be more effective than teaching one class for 17- and 18-year-olds who already have developed some spending patterns. Still, the high school course is a huge start and it would certainly leave those kids in a much better place financially than their peers who didn’t take the course.
Many states don’t offer finance classes because, ironically, they don’t have the funds to offer separate courses or to provide adequate financial training for teachers. A step in the right direction, then, might be to incorporate financial management into core classes, such as doing financial word problems in math or playing board games that teach about money, like Awesome Island.
Personal financial education is extremely important for kids. Particularly for kids from low income families, it’s important to learn that you don’t have to be rich to save money – you just have to be willing to put a few dollars away.
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