When parents look at their child’s curriculum, they may be surprised to notice some courses. They may wonder why money should be taught in schools. Various methods that deal with cash are definitely in a student’s best interest.
Parents Are Not Always The Best Teachers
There are several reasons schools are better equipped to teach money issues than parents.
- First, some parents do not educate their kids about money at all. They believe since they provide everything their children need, it is unnecessary to discuss financial issues. Some kids finish high school without knowing how much money their parents make or the bills they pay regularly.
- Second, parents who do try often have a personal bias. They assume whatever financial management worked for them will work for their kids, too. Although they have good intentions, they may not realize that financial matters for young people today can differ from their own experiences.
- Third, the money management tools some parents provide for their kids are not always realistic. For example, you may have seen ads for debit cards in which kids are paid for chores or given allowances and consider it all to be spending money. It does not teach kids about bills and other expenses or saving for a purpose other than to buy an expensive item.
How Should Money Be Taught In Schools?
These days, money management is not about teaching students how to write a check or balance a checkbook. Students need to learn how to budget effectively. They need to know income is not all for spending.
At the most basic level, money management courses should provide a realistic view of expenses students can expect when they are adults. While it’s impossible to know how much money they will earn when they enter the workforce, they need to know their income will be affected by bills.
This generally includes rent or a mortgage, expenses involved in owning a car, health and life insurance, and utility bills. There are also everyday living expenses, such as groceries, clothing, pet supplies, and household items. Students need to learn responsibilities come before hobbies, entertainment, and fun.
Financial Security Starts With Saving
Students need to learn about saving money for specific purposes and long-term savings. A good rule of thumb is to keep a certain percentage of every paycheck.
Students who want to save for something specific, such as a car or holiday gifts, should be encouraged to open a savings account.
However, long-term savings can be entirely different. As students are never too young to consider retirement, they should be taught the options they have for retirement savings. From 401k retirement savings plans to old-fashioned savings bonds to CDs, high school students should learn about all the options to be financially secure when they retire.
Money management in schools should also cover sensible investments. This may reduce a student’s risk of losing money with stocks or reckless gambling.
For decades, some schools have had the practice of providing savings accounts for students. This is a helpful way to teach kids the benefits of saving money. When schools emphasize the importance of accumulating savings, kids will be less inclined to withdraw money for frivolous purposes. Even kids in elementary school enjoy watching their savings grow.
Financial Issues In The 21st Century
Another reason schools should take the initiative in teaching students about money is there have been lifestyle changes in recent decades that did not affect as many people in the distant past.
One example is the high divorce rate. In the past, most married couples assumed their marriages would last for life. Today, more teams struggle with financial complications that come with divorce. It can range from long-term child support to loss of property, loss of a spouse’s benefits, or even bankruptcy.
A second example is an increase in single parents. Too many young people become parents when they are not financially secure. With “welfare reform,” they are often required to obtain jobs before they have adequate skills and education. This means many young adults have no option but to settle for minimum-wage jobs. Even if they can provide for their children, there is no money left to save or invest. Single parents in this position can spend their lives in poverty, and retirement can be a nightmare.
It can be helpful to provide students with a realistic picture of what can happen in their lives. They can better get through unexpected situations without experiencing a financial disaster. They can be prepared for nearly any situation yet remain financially stable.
Encouraging Students To Earn Their Own Money
While schools and parents alike should encourage teens to make wise choices and decisions, part-time jobs can also help students learn to manage their money. Instead of looking at income solely for entertainment, the emphasis should be on saving.
A wise parent expects their teens to earn and save for essential expenses. It is not helpful for parents to buy their kids everything they want. Instead, teens should save some of their income for their first car, apartment, or college education. Schools should do their part to reinforce these priorities.
Financial Security Starts At An Early Age
Even the most well-intentioned parents can miss the mark when educating their kids about financial issues. The days of writing checks to pay all of one’s bills, and depending on a spouse’s Social Security benefits, are no longer applicable today. It can be complicated for young people with inadequate education in financial matters.
This is why it is a good idea to have courses in money management in every school. While it is essential in high school, middle schools and elementary schools can start teaching the basics. Younger students can become interested and excited when learning how to manage money.