Wednesday, May 12, 2010

Financial Literacy Important, Too

Our teen's high school has a practical arts requirement, which is fine. Students have to take courses such as word processing, publishing, computer-assisted design, etc., in order to graduate. But I think there's one course that ought to be mandatory for all -- basic personal finance.

When some kids, or their parents, are taking on substantial debt to attend college, I wonder if the students understand the ramifications? Do they know how to weigh the value of the education vs. cost? Do they consider looking at a public college in order to make their start in adult life less stressful, more open to opportunities? There's no right or wrong decision as far as these life questions go, but it would be helpful if there were a base of knowledge.

In late 2009, FINRA (Financial Industry Regulatory Authority), released the first comprehensive study of financial literacy in the U.S. Commissioned by the Department of the Treasury, the report found that most Americans do not plan ahead, whether having a rainy day account for emergencies or funds for anticipated events such as children’s college education or their own retirement. Nor do they understand elementary financial concepts.

And if parents don't understand the basics, who will teach the children the ABCs of personal finance?

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