Financial literacy for kids is not an elective in life.
It’s a paramount job of parents to teach financial literacy to your kids. Still, we all know that every few years there is legislation, a handful of speeches and pilot project funding to teach financial literacy to young people. In today’s world of highly complex financial systems, we all need help learning the ropes.
Many of the financial literacy efforts have been helpful and well intended but overall our state’s approach to teaching kids financial skills and ultimately a sense of personal fiscal discipline is weak at best. While this is an area we know parents must always lead, we also know that many parents themselves don’t have good financial skills.
Let’s wake up and recognize that it’s time to ensure kids have a much richer appreciation for the role, importance and subtly of financial skills.
What is debt? What is a mortgage and an appropriate debt load? How and why do you build credit? What happens when you don’t know how to use a credit card responsibly?
The federal government has built a website to teach kids financial skills. A number of private foundations have done the same. Here’s a handful of sites here, here and here. There are arguably hundreds of strong programs around the country. There are books for parents, websites for kids, pamphlets for teens and much more. We have the materials, let’s focus on the task at hand.
I’d like to see a coordinated effort by our state to get serious about teaching young people how to be responsible managers of their own money. I also happen to know another legislator who shares a passion for this issue, House Speaker Frank Chopp, who has long advocated a more aggressive approach to teaching responsible money management.
I believe now is the time and this is the year.
The financial crisis happened not only because financial institutions took ruthless advantage of people, it happened because regular folks didn’t know and appreciate the true implications and risk associated with variable rate mortgages, credit card debt, payday loans, equity lines of credit and much more. Let’s acknowledge that rebuilding our economy requires addressing the core challenges we face as a society. Parents who don’t know what a variable rate mortgage is can’t teach kids what they mean.
Maybe I’m dreaming but I don’t think we need a new department, agency or large program. We don’t need a formal curriculum approved by the state Board of Education. We need some really smart, dedicated and thoughtful education professionals to reach out to the most effective websites in the nation in this area and to distribute those sites to educators to incorporate them into their teaching in ways that work for educators on the ground.
Financial literacy for teenagers could, for example, be a piece of math education, especially since kids learn in experiential ways in math and science in dramatic ways. You don’t necessarily nneed to overlay a new curriculum or model, you could weld the pieces together in meaningful ways. I know of many teachers who are passionate about this issue and work hard to incorporate this learning into their daily work in the classroom. Let’s empower their success at a broader level.
A little journey back: I remember my own 8th grade class in Bellingham when we ‘played the stock market.’ I was really, really good at the project…until the teacher announced the Stock Market Crash and I lost all my assets. (It’s made me a conservative investor ever since!)
I would appreciate your thoughts about how we could better teach kids financial literacy, and ideas you might have for legislation in this area next year.
Your partner in service,