Financial literacy lessons should start early

Filed under: Opinion |

Charting a course for fixing the financial woes of the U.S. economy has turned out to be a more complex and daunting task than many ever thought possible. Families across the nation have been profoundly affected as parents have lost jobs and belt-tightening continued as the recession persisted.

April is National Financial Literacy Month, an effort to highlight the importance of financial literacy and teach young Americans how to establish and maintain healthy financial habits.

What are we doing to address the issue? Why spend time on financial literacy with our children? Because that knowledge enables students to manage savings and checking accounts, household budget, to understand consumer credit and finance, to manage personal credit options, and to understand and select among short-term and long-term investment options.

How many adults among us would fare better if we had received such instruction?

The state of Colorado and specifically the Colorado Department of Education is leading the way in educating its youngest citizens. The Colorado Department of Education has developed a financial literacy resource bank to provide technical assistance in financial literacy to school districts responding to House Bill 1168, which passed in 2008 and required the adoption of standards for Financial Literacy.

A Personal Financial Literacy Summit for school district leadership will be held April 8 in Aurora. The purpose: to bring together district leadership in order to support the implementation of personal financial literacy expectations as part of Colorado’s newly revised mathematics and economics standards.

We know where adults stand in the midst of this financial crisis, but what impact has it had on our young people?

Teens have had to look at money differently and have altered their spending habits.

In a recent poll of 1,000 teens conducted by Junior Achievement and The Allstate Foundation, 74 percent of teens said they should have a credit card by age 21. Yet over half of the teens surveyed said they are unsure how to effectively use credit.

Furthermore, nearly a quarter of the teens surveyed reported that they do not budget their money. Of those who do not attempt to manage their money, 53 percent don’t think it is necessary given the amount of money they have to manage, 42 percent aren’t interested and 37 percent report that they just don’t know how.

Have we adults — the parents, educators, business leaders, and role models — taken the time to teach children how to manage their money over a lifetime?

Over-extended credit and living without a budget are two elements that deepened the recession and made it very difficult for families to rectify their own financial troubles. Teaching teens good spending and saving habits, giving them the right tools, and instilling discipline can put our youngsters on solid fiscal ground.

Let’s help our young people by supporting their desire to learn how to manage their money, now and in the future, especially in terms of how they manage credit.

Barry Straub is chairman of Junior Achievement of Southern Colorado Inc.