Written By: Van Nguyen
With my love of children and my background in elementary education, my thoughts naturally went to the children in my family when I tried to think about what to write for this latest article. Are the schools teaching our children what they need to know to become financially responsible adults? Should parents take a more active role in teaching their children to become financially literate? How do we approach the topic with our children? What is out there to help us with our task?
I don’t remember learning too much about personal finance when I was going through school. We learned about the different coins and bills in elementary school. We were taught how to balance a checkbook as part of some math lessons one year. As part of a unit on newspapers, we learned how to find the prices of stocks in the finance section of the newspaper. We even chose stocks and kept track of the gains or losses over the time period of the unit. We never did any research, however, when deciding what stock to choose or to learn why we gained or loss money had we actually invested in the stock. I remember my sister’s class ran a business selling school supplies before and after school and during lunch as part of one of their units (my class never did this). These disjointed memories are all I can remember of learning about personal finance in school. It is not surprising since, according to an article written by Layne Wood on July 26, 2010 titled Financial Education for Children, “as of 2010, only Utah, Missouri, Tennessee and Virginia require students to take at least one semester of a personal finance related class, while 20 other states require that personal finance instruction be included as part of other classes.” That’s less than half the country requiring that our children be taught how to understand and manage their personal finances. According to a national survey done by the Jump$tart Coalition in 2004, “Parental involvement plays a great role in the financial education and literacy of young people, as the vast majority of students say they are learning most of their money management skills at home. Of the students surveyed, 58.3 percent said skills are learned at home.” So whether we want the task or not, the task of helping our children become financially literate falls to parents and other adults in our children’s lives.
Left to their own devices, each child’s interest in finance develops differently and at different times. One of my nieces, when she receives money as a gift, likes to keep it rather than giving it to her parents to keep. At age 11, she was already charging her father a 20% interest whenever he asks to borrow money from her if he doesn’t have any cash on hand. My eldest niece on the other hand, wasn’t even interested in money until she was old enough to start going out with her friends without a parent having to be with them at all times. Before that, she had always told her parents to keep the money whenever she received any as gifts and didn’t really care what they did with it.
So, when do we start teaching our kids what they need to know and what should we teach them about personal finance? The Jump$tart Coalition® for Personal Financial Literacy created the National Standards in K-12 Personal Finance Education to serve as a guideline to help create a curriculum to teach children about personal finance. The standards are divided into six categories: Financial Responsibility and Decision Making, Income and Careers, Planning and Money Management, Credit and Debt, Risk Management and Insurance, and Saving and Investing. As parents and not professional educators, we are not qualified to teach all these things to our children, but we can certainly give them a head start. The curriculum will help us to see what our children, as well as we ourselves, should know about personal finance. To see a summary to the curriculum and a link to the entire document, please click here.
How do we go about making sure that we are presenting our children the correct information and instilling in them good practices? My favorite website with resources for learning about personal finance is TheMint.org. This is a website created by Northwestern Mutual Foundation in partnership with the National Council on Economic Education (NCEE). There are sections for Kids, Tweens, Parents, and Teachers. It is laid out in a friendly manner, doling out information a little at a time. There are some very practical teaching ideas, many of which involve things we do regularly, but just need to be taken a step further to make it a learning experience that both parents and children will remember. Another useful website is the Institute of Consumer Financial Education (ICFE). This website is not as “pretty” as the previous one mentioned and is more commercial, but it is still a good source for ideas and information. Smart About Money (SAM) is a program from the National Endowment for Financial Education (NEFE®). One portion of their website provides downloadable resources. Follow this link to the resources specific to educating our youth. There are many reliable sources out there with information that we can use to aid in our task as teachers to our children, so check them out.
Being able to understand personal finance and making good decisions should start at a young age. Schools have started to require lessons on personal finance, but not enough schools have done so. Our children depend on us to teach them what they need to do to be financially sound when they grow up. Research your available resources and educate yourself and your children on what they need to know to get a start in the right direction.