Several recent studies reveal that American childrenfall short when it comes to having adequatepersonal finance skills. High school graduatesheading off to college are often ill prepared tohandle basic financial tasks, such as balancing a checkbook,budgeting an allowance, or handling credit issues.
To remedy the situation, financial institutions, educators,and the federal government are designing courses,advice sheets for parents, interactive Web sites, andother materials that focus on improving the personalfinance skills of childrenâ€”from preschoolers toteenagers. Physician-parents also must play a vital role inshaping their child's financial literacy.
Limited Money Skills
New York Times
According to a recent report, consumergroups and economic leaders emphasize that it isimportant for young people to learn money managementskills, especially as more types of financial productsbecome available. And it appears there is a lot to belearned. In a study by the market research groupTeenage Research Unlimited, teenagers reported thatthey spend 98% of the money they receive from parents,jobs, and other sources. Another study, released in 2002by the JumpStart Coalition for Personal FinancialLiteracy, also produced disturbing data. More than 75%of the 4024 high school seniors who participated in thestudy failed a series of personal finance questions, upfrom 59% in the previous survey conducted in 2000.
A small number of school systems have added personalfinance to their curriculums, teaching the fundamentalsof saving, spending, investing, and earning. Butaccording to the National Council on Economic Education,only four statesâ€”New York, Kentucky, Illinois,and Idahoâ€”require students to take a course that includesa personal finance unit. JumpStart and otherorganizations are trying to persuade more schools toinclude personal finance in their curriculums.
Resources for Parents
Parents now have personal finance materials to use inteaching their child financial concepts. Resources such asinteractive Internet and software games, stock marketsimulations, lesson plans, workbooks, and computer-basedcalculators have been developed for use by parents,teachers, and children. Dara Duguay, the executivedirector of JumpStart, says that some of the best corporation-backed sites and curriculums are those that havesought the help of organizations with experience in personalfinance education or education in general.
Bank of America, paired with the National Councilon Economic Education, provided $3.2 million to createFinancial Fitness for Lifeâ€”a curriculum for kindergartenthrough high school. Teachers in 21 states and theDistrict of Columbia have been trained in the curriculum.The program is also suitable for home use. Guides forparents, including worksheets and activities for children,are available at www.fffl.ncee.net.
For more information
Other personal finance Web sites designed for children include the following: