Thursday, March 19, 2009

Financial Literacy

When I was in 2nd grade we loved our classroom store where we learned about buying, selling, and making change
I've been reading lately that there is a push for teaching more financial literacy in the schools--and not a moment too soon, given the state of our economy! One article I read in our local newspaper (Clovis News Journal, print edition, Sunday, March 15, 2009) stated that high school students surveyed believed that they would be earning an average of $143,000 a year as adults. Few of those same students even knew how to set up a budget. 

Here are some other points made in the article:
-Kids as young as 16 receive credit card applications
-These same kids are financially illiterate--they don't understand interest, minimum payments, credit reports, identity theft, or that they will be paying off their student loans for years to come
-One third of college students have 4 credit cards apiece by the time they graduate
-More than half of college graduates already owe $5000 each in high interest debt
-The number of 18 to 24-year olds declaring bankruptcy has increased 96% in the last 10 years

When I taught in a middle school, many of my students were convinced that they would become rich and/or famous by being rock stars, highly paid athletes, or by winning the lottery. These were the same kids, I'm afraid, who were not trying very hard in their academic courses--they were just kicking back, waiting for the money to start rolling in. 

U.S. Senator Patty Murray (D-WA) has "introduced legislation that will make a substantial commitment to revamp financial literacy programs in K-12 schools and colleges. The bill, the Financial Literacy Improvement Act of 2008, will invest $250 million to support new personal finance education programs." To read more about her proposed bill, see her press release.


Judy said...

This is a great post. I don't know what makes kids today think that money is something that grows on trees and that everything in life should just be handed to them. We have messed up somewhere along the way. We sure do need more financial literacy in schools. I totally agree.

Sylvia K said...

I agree, this is a great post! My kids have done well managing their money, but it took making some mistakes early on. I do think more financial literacy is necessary in schools today. In fact, I wish there had been some when I was in school. I, too, had to learn some things the hard way.

Quiet Paths said...

I have a 17 year old and I haven't seen any CC info addressed to him yet but it may well be I just toss it along with the Join the Army of the Elite Few fliers that come through the mail... Our twenty year old gets CC apps however! This was really interesting, and thanks for writing about it.