by Das Brain
If you are a person who does not manage your money very well, have you ever thought why that is so?
I have, when I was in my mid-twenties, and I can attribute some of it to my personality, friends and lack of financial education. In school, whether it was public school, junior high and even high school there was pretty no course which taught “personal finance 101.”
In a U.S. survey done in 1997 senior high school students were asked a set of 31 multiple choice questions about saving, spending, credit, investing and insurance, the average student got only 57% correct answers. Three years after that in 2000 the score fell to 52% and in 2002 the average score fell to 50%.
Can the low level of personal finance knowledge in high school and university students attribute to the fact that there is a large amount of students with hefty student loans and credit card debt?
Economics is taught in the senior years of high school and freshman years of university, but that is too broad a subject and does not focus on the person ie. the student. Students need to be taught about saving and the dangers of credit cards, but instead in universities allow credit card companies to bombard students with easy credit on campus.
For myself it wasn’t until I was in my mid-twenties that I really started to educate myself about personal finance, investing and trading. I made it a point not to borrow too much money for college, instead I worked at Radio Shack and saved for my tuition. When I got into the workforce my student loan was just $7000. I was fortunate that I realized I needed to educate myself in personal finance, however it would have been great if my parents or earlier in school I was taught better personal finance principles.
Teenage research psychologist has pointed out that a teenagers mind can be better and easily molded if you are able to teach them good habits before they start to engage in bad habits. Once those bad habits begin form in the brain, it gets much harder to undue or reverse those bad habits. From this fact, then I guess it would be safe to say that if you are to teach your kids or future children about good money habits then you should probably do this before their teenage years.
I read and listen to a lot of books and audio books respectively, and one of my favourite authors is Robert Kiyosaki. One of key things that Robert Kiyosaki stresses is financial education and some of his books do cater to teaching kids about money. I think one title is Rich Dad’s Escape from the Rat Race: How to Become a Rich Kid by Following Rich Dad’s Advice
Another resource that I came across is a company or website called “Money Savvy Generation.” They have a product called the Money Savvy Pig that teaches kids as young as Grade 2 about the concept of money. This product teaches the basics of saving, spending, investing and donating through a plastic piggy bank with a slot for each of the basic listed above. So, there is a coin slot for saving, a coin slot for spending, a coin slot for investing and one for donating. This system has been proven to teach kids in a short time about money concepts and the kids show that they actually do “get it.” By teaching young kids about money using dimes and quarters, it is less non-threatening and mistakes are less costly, so the kids are less afraid to embrace the teachings. The company also have many other products that are geared to teaching kids about money. You can check out “Money Savvy Generation” by visiting their website yourself.
In conclusion, I think that everyone as parent or future parent should be teaching their children smart money skills to ensure that their kids grow up to be successful and self sufficient adults.
It is clear that we cannot expect this education to come from our public school system.
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