Some parents teach personal finances to their children at home. However, most do not. Only a handful of states require personal finance education in high schools at this time. So where do most children learn about money? Usually, the evidence suggests, they learn about it on their own in real-life trials by fire. Those who do start their financial lives with a solid foundation of personal finance information tend to be much more successful throughout their economic lives.
Now more important than ever
According to CNN, having a working understanding of basic personal fiances is more important than ever now. The economy remains uncertain, college costs are on the rise, the job market is still iffy, and young people are confronted on a daily basis with advertisements and other enticements on the social media, designed to suck money out of their unguarded pockets.
Laura Levine, the executive director of Jump$tart Coalition for Financial Literacy, said:
“Kids don’t know enough about personal finance. Our surveys consistently show that over the years.”
Many parents are ill-equipped
It’s not just the kids who are unprepared.
While some children do learn about money from their parents, according to finance expert Nan J. Morrison, head of the Council for Economic Education, many parents are ill-equipped to properly do so.
“If there’s one lesson we’ve learned from the recent recession and its painful fallout, it’s that an alarming number of Americans lack the basic dollars-and-cents understanding they need to navigate today’s global economy. The gap between what people know and what they need to know is widening every day.”
Some sobering facts
She offered up some sobering facts on her Huffington Post blog. According to Morrison, a recent survey found that only about half of adult Americans can properly define “budget deficit.” About a third — 29 percent — have no savings whatsoever. More than 9 million Americans have no bank account, checking or savings.
Morrison finds this situation untenable. She wrote:
“We know that financial and economic literacy changes the way people see the world and their roles in it. Ignorance is not an option we can afford.”
School curriculum inadequate
So, with parents unmotivated or unequipped to pass this basic knowledge onto their children, that leaves the schools to take up the slack. However, according to Jump$tart, only four states require high school graduates to take a personal fiance course at this time. Those states are Missouri, Tennessee, Utah and Virginia.
Other states do require that personal finance topics be included in economy classes, but most states do not require students to take economy course, either. In most states, economics and personal finance courses are available as electives only.