Are we doing enough to teach children about the bountiful opportunities that come with personal financial responsibility?
While the math of money may be a short chapter in an elementary text book, financial education takes place mostly in the home, and unfortunately that financial home-schooling is sorely lacking. If you disagree, just do some basic research and read how most households are just one paycheck away from struggle or devastation. At least once a year, a national publication will note that most families in America cannot pay for a $1000 emergency, unexpected car repair, etc.
Household and personal finances that are “not looking so good” cause incredible amounts of stress in the home, in the family, in relationships, and at work. Some would say that most arguments between spouses are based squarely on money. The resulting stress can lead to even worse spending habits, decreased stewardship of the community, depression, substance abuse, physical abuse, divorce, and homelessness.
Personal finance is something that we each deal with, every single day, no matter our age or status. And yet most of our financial education comes from our own trial and error, and from witnessing our family members’ habits. We often wind up much like our parents. Some of us tend to operate like those people in our small friend groups, and do our best to keep up with the Jones’.
Or, in some unique cases, our childhood experience is so extreme that it motivates us to move in the opposite direction. (Grow up in poverty and become motivated to earn a far better living.) (Or grow up in utter luxury, yet find that a simple lifestyle is more attractive later in life.)
In many public schools, personal finance is “taught” by volunteers, over a total of just five hours, via the Junior Achievement program. This is a great curriculum that is supported by private donors and corporations, and offered at no charge to classrooms that can find a willing volunteer to make the once-a-week-for-five-weeks appointment. The program is available to Kinders on up, and each year the curriculum becomes a little more complex: Kinders may only learn that “mommy goes to work to earn money,” while fifth graders learn about paying taxes, funding a business, etc. Junior Achievement is great, but it’s still only five hours of hands-on education per school year, led by volunteers.
We need to do better.
Since personal finance is something that causes most people so much stress, then we should get started right away, and not let up until we can confidently say that in America, the majority of people are financially educated and responsible.
“Americans not only know HOW to earn, give, spend and save, but they DO it, and they do it WELL.” That would sure be nice to read… if it were true!
Today, schools have a massive opportunity to make a positive impact on their students’ lives and families, by way of adding a robust and ongoing personal finance curriculum. And I believe that private schools are in the best position to make that change quickly and effectively. Plus everybody wins:
- The student learns that we all need to 1) use our God-given talents to earn money, 2) give back to the church and community, 3) spend on what we need, and 4) save for large items, investments, and retirement. That student will positively influence her siblings and parents.
- As the student grows up and starts a family, there will be less stress in the home, less abuse, less divorce, and happier households.
- As an adult, 25 years from now, the former student will be in a better financial position to invest in private school for his own children.
- As an adult, the former student will also be more capable of making more frequent and more transformative donations to her church and other community organizations.
What can students of all ages learn about personal finance?
- Discovering our God-given talents and how to use them to earn money, no matter our age
- Paying taxes, where the tax money goes, and how it can help the entire community
- Finding organizations that we appreciate, and understanding how they need our financial support, no matter our age
- Understanding the differences between things we need and things we want, and knowing when to buy some of each
- Being aware of all household bills and expenses, including food, utilities, rent/mortgage, entertainment, insurance, etc.
- SEEING the charts/effects of compound interest, how common investments work, and how to look into getting started, no matter our age
- Planning for large purchases like a nice bicycle, a new computer, college, a car, a vacation, or a home
- Learning to appreciate money, and how it can help us and others, but to never idolize it
- Truly appreciating others’ talents in society, how they each play an important and much-needed role
by Thom Hiatt at (858) 877-3733