MOMania

By new mom

January 22, 2009 8:34 AM | Link to this

Well, our daughter hasn’t mastered personal finance yet (at 16 mths) but teaching her these concepts is near the top of my priority list for her as she grows up. We opened an investment account for her college savings, and also a traditional savings account for her. The savings account will be a tool we’ll use to teach her about how a bank works, earning interest, and most importantly, the concept of saving money.

Things may have certainly changed since I taught school (5th grade, seven years ago) but incorporating financial concepts into our lessons wasn’t ever mentioned or encouraged. There were times I tried to teach things along the way, once I remember trying to explain how a credit card actually works…and I received the deer in the headlights looks. It wasn’t a matter of them not being able to understand what I was explaining, but that they had obviously never had anyone ever try to teach them about money.

Ultimately, I believe this is the parents’ responsibility. It’s not taught in schools because traditionally, parents made sure that these concepts were taught and reinforced in the home. Realistically, it probably would be a good idea to try to incorporate financial concepts in school (and the earlier the better, not waiting until high school) but perhaps there needs to be even more classes for parents to attend… That’s where the problems start!

By JJ

January 22, 2009 8:46 AM | Link to this

Finances should be discussed in the family, not the schools. The schools are already burdened as it is.

Personal finance should be taught by the parents, by leading by example and talking to the kids as they grow. I’ve always talked to my daughter about money.

She knows I don’t have any credit cards, and that everything we have has been paid for with cash. I told her my troubles with credit cards in my 20’s.

She now has a checking account with a debit card. She has learned first hand that she needs to balance her account weekly. Keep receipts and compare to the bank statement. She goes on line and checks her balance daily.

I’m so proud of her. She is saving for a car, and is “giving up” alot in order to save. She will go out with her friends, but if they go eat, she will get a small salad. She won’t buy big fancy things, as it takes away from her car fund.

She is learning to budget her money too. She is responsible for some of the cell phone bill, and for her share of insurance on the vehicle. Once she has her own car, she will be totally responsible for its maintenance and all the insurance.

Teaching kids about money management needs to come from the home.

By Michelle

January 22, 2009 8:52 AM | Link to this

I think the teaching of finances should be a combination of both school and home. Some parents are good at saving, etc, but they really don’t know all the true “stuff” about finances. They are just frugal and prudent with their spending. That can be a learned behavior for sure. The schools can help reinforce what the parents are trying to instill at home with the true explanation of what the financial pieces actually are (interest, compound interest, etc.)

I had to take econ as a senior back in 87 and my step son is taking it now as a senior. However, I don’t think it truly teaches what they need to know.

I think part of the problem in today’s society is the “gimme” problem. Our children have been given everything they want. They haven’t had to purchase anything with their own money! If they really had to put forth some effort, they might make better financial choices.

Also, as it states above, if your parents are uneducated about finances, what can they teach you? It becomes a cycle that cannot be broken!

By Becky

January 22, 2009 8:59 AM | Link to this

Michelle, your last sentence says it all about my parents..

So, I would like to see a class offered that would help children..Yes, I do think that the parents should be doing the teaching, but sometimes it doesn’t happen..

By JJ

January 22, 2009 9:13 AM | Link to this

Michelle My daughter will spend MY money like crazy on stupid stuff. However, when she is told she has to spend her own money, it’s amazing how she doesn’t HAVE to have ha ha

By Meme

January 22, 2009 9:18 AM | Link to this

Since finances differ from family to family, I personally think that it should be the responsibility of the parent.

By lynn

January 22, 2009 9:18 AM | Link to this

I agree with Michelle & Becky. Some adults are just plain ignorant when it comes to finances. I see it every day in my line of work and quite honestly, it’s sad!! Every young adult should understand at least the basics by the time they leave school and enter the job market. Knowledge at a young age can pave the way for your future. I took personal finance pretty much as an elective all through high school because I enjoyed the class and what it gave me. I’ve also passed this down to my children and it seems to be paying off. My daughter just turned 17 and not only has a job, she has a checking account, debit & credit card and so far she’s proved more than capable of handling her finances by herself.

By jct

January 22, 2009 9:31 AM | Link to this

There is a difference between teaching the mathematical part of finances (compound interest, debit, credit, etc.) and teaching financial responsibility. The first part should be integrated into math classes. These concepts are already taught, it is just using the language; using more word problems, etc.

Teaching financial responsibility should start at home. That is the parent’s responsibility. I think the schools have enough to teach without them taking on this part of the responsibility.

I was lucky enough to attend a high school (in the 80s) that business math was integrated into math classes. I got the basics. I learned financial responsibility by watching my parent’s inability to budget and plan. Yes, you can learn from that as well. I don’t run my household like they do. I don’t spend on credit the way that they do. However, that was taught (or not taught, depending on how you look at it) at home.

By CleverShrew

January 22, 2009 10:15 AM | Link to this

I am about to be very self-deprecating here, but I would greatly have appreciated a class in financial responsibility.

See, I’m an MBA. I know all about the time-value of money, investments, etc, but my credit score is in the toilet, and I have more debt that anyone possibly needs. All the business school helped me to do was make more money so that I could go and spend more money. Not very responsible.

I think parents should be the ones to teach their children, but in my family, my mom is worse than me. She spends like there is no tomorrow, has a dozen credit cards and is in bankruptcy now. So what did I learn?

If the parents cannot teach it, then I believe the school should have classes aimed at learning how to manage money. I know I would have been glad to have that class!

By Jesse's Girl

January 22, 2009 10:34 AM | Link to this

Excellent point CleverShrew! I had finance in high school….well, infant finance. How to fill out and correctly balance a checkbook, how to budget and how to determine the median amount needed to live and still save….of course this was also the high school that employed the PE coach that told me should become a stripper:) Bring on the Finance classes for our kids!!!

By BRC

January 22, 2009 10:47 AM | Link to this

You would appreciate the classes now with hindsight, but would you have taken the lessons to heart then? Or would have just been another class, like history or english, where facts and figures are presented and learned for the test, but not applied in real life?

I think personal financial responsibility is learned through experience, so the best teacher for this concept is life. A student will learn more from having a job, earning a paycheck and paying taxes than hearing finance presented in the abstract.

By Theresa

January 22, 2009 10:50 AM | Link to this

More articles on financial literacy and our kids](http://www.usnews.com/articles/business/your-money/2009/01/13/5-ways-obama-can-improve-financial-literacy.html)

By Stacey

January 22, 2009 11:04 AM | Link to this

I think it should be a combination of both. Ideally, it would be taught at home but as stated in the article, adults (parents) don’t properly understand it themselves so for them to teach their kids what they “know” would be a disaster.

When I was in high school (20 yrs ago) we had to take one semester of economics before we could graduate. (At my school it was considered the 12th grade social studies course). It was also a part of the core curriculum in college. My high school also offered accounting, bookkeeping and “life skills” as elective courses. The life skills class taught things like writing checks, balancing a checkbook, budgeting, etc.

By Gordon

January 22, 2009 12:58 PM | Link to this

Theresa, This is a great topic for discussion. There should be more education regarding the economy and personal fincanc. so many kids are graduating from high school and even college and have no concepts about budgets, handling credit, mortgages, saving, and preparing for retirement. They don’t understand how the dollar fluctuates or how the market works and can cause some of the highs and lows we have seen lately. Yes, parents do need to have input in this, but the school system should also educate students on this real world real life topic, much the same way students are educated about real life topics of Algebra, Geometry, Biology, English Lit,and Social Studies.

By lynn

January 22, 2009 2:11 PM | Link to this

Gordon, I second that. Look at China. They teach business and economics from the time the child can walk. I started at a very young age learning the value of money. I remember wading through the snow (in Tennessee) to sell grit newspapers when I was just 10 and made about $25 a week. Not bad huh? Then we did the seed selling bit and of course picking up the coke bottles for .5 each. Those little lessons in life have made me who I am today and I wouldn’t take anything for them.

By JJ

January 22, 2009 4:11 PM | Link to this

Hey Theresa, I don’t think you got the responses to today’s blog subject that you were expecting.

Therefore, I am hi-jacking the blog tomorrow for “Free For All Friday”.

Sarah If you are out there, would you like to pose a topic for us?

I know for a fact this blog will stay up until the weekend. Usually when Theresa puts a topic out on Thursday, we still have it Friday……

By CleverShrew

January 22, 2009 4:19 PM | Link to this

JJ:

I know, I am really bummed about that. This was actaully a very good topic. But won’t Sarah be offended if we do not stay on blog topic?

By jct

January 22, 2009 4:47 PM | Link to this

Todays topic was excellent. There is even a complimentary blog on the MIA blog. They are talking about dating someone with bad credit.

Hmmm, if we don’t teach then our children become potentially undateable as an adult.

By CleverShrew

January 22, 2009 4:55 PM | Link to this

could you imagine? We go from “What’s your sign?” to “What is your credit score?”

By FCM

January 22, 2009 5:26 PM | Link to this

Teaching your child to be Fiscally Responsible is the Parent’s Job. As it teaching them to think outside themselves and help others.

A school would do well to teach a child about things like compound interest, reconciling a statement/invoice, and determing the stock market.

It is a Parent’s job to make sure Johnny can read, write and Cipher but it is the school who primary in teaching in Johnny those things.

By fk

January 22, 2009 5:53 PM | Link to this

I think a good combination is for the lesson at school and reinforcement and applications at home. The kids really need to learn about finance charges and APRs and how much credit actually costs. So many young people get themselves entangled in credit debt and cannot get themselves out.

My son has been earning his own money since he was 12, mowing yards. And, at 18, he is still doing that, as well as working a part-time job. He’s a senior this year. He has made major purchases, including an expensive game system, but only after he’d saved up enough money. He thought about the decision long and hard. There is no impulse buying on his end. He had researched different stores, thought that one of the warehouse places had a better deal, but he had over $125 in gift cards to a major retailer. He would have saved about $25 at the warehouse store, but would have had less money in his wallet at the end of the day. He used his gift cards as he feared that someday they might be worthless the way the economy is going.

This was a good topic. Where is everyone today?

By Layla

January 22, 2009 6:20 PM | Link to this

This is a very appropriate topic. I usually don’t believe in putting more burdens on the school system, but apparently few people know how to handle money.

I would start a class in junior high/middle school, maybe as part of home economics, and make it a couple days a week until they graduated. From what I remember about some of my classes, they can take away time from driver’s ed and health and it wouldn’t make much of a difference.

I graduated from college knowing next to nothing about handling money because my parents thought I didn’t need to know their financial situation. They basically told me to save 10% of what I earned…. and that was it. I spent almost the next decade really struggling with money and my credit score tanked.

Thank God, I learned my lessons and I’m able to get ready to buy a house now.