Teach Your Children

Financial literacy is a badly neglected educational need. There are places you can turn to help your kids learn to handle money and build wealth.

Huge numbers of Americans approaching retirement age have not saved nearly enough for their later years. The Federal Reserve reports that Americans carry more than $2 trillion in consumer debt – nearly $8,200 in debt for every man, woman and child.

Four in 10 Americans have less than one month’s income in a bank account for emergencies. About three in 10 consumers say they have no extra cash and live from paycheck to paycheck.

Why are so many adults in such poor financial shape? Possibly in part because they never became financially literate while young. And as a society, we still do a poor job of teaching young people how to manage money. Little wonder then that:

• Only one in three teens know how to read a bank statement, balance a checkbook or pay bills, and only one in five have any idea how to invest.

• Only 45 percent of teenagers know how to use a credit card and just one in four understand credit card interest and fees.

• Some 32 percent of students leaving college have four or more credit cards.

Finding the path

What’s the state of your children’s financial literacy? One favor you can do them as a parent is to help set them on a path to a financially sound future, starting at an early age. The traditional advice on teaching kids about money – set a good example, give them an allowance, take them along grocery shopping, play money games, show them the value of working for pay – is fine as far as it goes.

But if you want to send your kids out of the nest knowing how to live on an income, save, budget, borrow intelligently, invest and plan for retirement, there is a great deal more you can do.

Right now, fewer than 30 percent of young people receive even a week’s focused coursework in money management or personal finance while in high school. Fortunately, you can find a variety of programs that give your kids valuable advice and practical experience in financial matters.

Perhaps the first place to look is within your local school system. Growing numbers of schools offer financial literacy courses. If such a course is offered in your high school as an elective, encourage your sons or daughters to take it.

Ample resources

Inside or outside school walls, there are many other ways to help your kids get a solid financial education. Here are a few.

MoneySkill. This program, sponsored by the AFSA Education Foundation, is a free online financial literacy course containing 34 modules on every aspect of personal finance, from income and taxation, to owning and renting a home, to borrowing and investing, to insurance and retirement.

The course is designed as a tool for teachers in financial literacy courses, but parents can enroll their children independently. The Web site at www.moneyskill.org says more than 6,500 teachers from all 50 states have registered to use the course to teach students personal finance concepts, and more than 118,000 students have been enrolled in the course since its inception.

Junior Achievement (JA). This worldwide organization is dedicated to teaching students about workforce readiness, entrepreneurship and financial literacy through hands-on programs. Programs show students how to generate wealth and effectively manage it, how to create jobs and how to apply entrepreneurial thinking at work.

The JA approach lets volunteers from the community deliver the curriculum and share their own experiences with students. Programs are available for kids from elementary through high school. On the Web site at www.ja.org, you can locate a JA office in or near your community.

Money Smart for Young Adults. This free program, from the Federal Deposit Insurance Corporation, helps youth ages 12 to 20 learn the basics of handling their money and finances and creating positive relationships with financial institutions. It consists of eight instructor-led modules, each with a fully scripted instructor guide, participant guide, and overhead slides.

The curriculum is aligned with educational standards for all 50 states and the District of Columbia. It can be used by professional educators as well as by informal educators. Visit http://www.fdic.gov/consumers/consumer/moneysmart/index.html.

Money Math: Lessons for Life. This four-lesson curriculum supplement for middle school math classes is offered by the U.S. Department of the Treasury, Bureau of the Public Debt. It teaches grade 7-9 math concepts using real-life examples from personal finance.

Offered free to teachers, the program was developed by the Center for Entrepreneurship and Economic Education at the University of Missouri-St. Louis in accordance with national school mathematics standards. The lessons were tested in Missouri schools and reportedly received excellent reviews. You can download the curriculum at http://www.treasurydirect.gov/indiv/tools/tools_moneymath.htm.

Another good resource is the Jump$tart Coalition for Personal Financial Literacy (www.jumpstart.org), which encourages curriculum enrichment to make sure young people learn basic personal financial management skills during their education from kindergarten through high school.

The coalition includes a clearinghouse of course materials and online mini-lessons parents and teachers can use to illustrate the personal finance principles that Jump$tart believes every young person should know.

Getting busy

Besides these programs, you can find many other financial literacy resources in a simple search of the Internet. Options range from formal courses, to online learning modules, to financial literacy camp experiences offered by regional organizations.

By helping your children become financially literate, you can set them up for economic success in life. You can also prepare them to take over your business someday, if that is your intent.

Why wait any longer? Consider investigating whether financial literacy programs are offered in your local schools and, if so, make sure your kids enroll. If nothing suitable is available locally, consider working with your school system to establish a program, or use the various resources available to parents to “home school” your kids in this important area. It’s an excellent investment in their futures.



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