Our kids are happy and proud they always pay off their CCards in full every month. S is quite proud of the balance he’s built up in his savings and retirement accounts.
Honestly, not everything people need to learn is something more to heal on schools. There aren’t enough hours in a day. The family and community also has to take sone responsibility for teaching young people. Bogkeheads.org is a great free resource—there are others as well.
Kids learn what they live. One short course about financial literacy won’t overcome decades of their parents spending like there’s no tomorrow.
Not everyone can be so fortunate to have such involved and bright parents in their lives as represented here. Also this is not just a question just for the cc level student. It’s a big country and we pay collectively for many sins.
One of these sins are the young and the poor people being chronically underbanked or payday loaned to death. No idea how to use credit and credit scores. Co-signing leases etc.
It’s an aging population that’s woefully unprepared for retirement.
It’s a college debt crisis many are calling the next big problem.
So it’s just more of the same, everyone ? It’s a bit of math in calc to learn compound interest?
How many American students actually take calc as a percentage.
It can’t be my kids are ok, so no problem here.
don’t we all think we could use some formalized financial planning for younger people?
Take a look at the depth and breadth of concern and questions in the “How much do you need to retire” thread.
the folks in that thread are some of the smartest and most well read people in our society. What do you think it’s like for the rest of the world.
Aside from one’s health, personal finances regularly come up as the leading concern for most Americans.
This isn’t worth putting in some programming during senior study hall?
Some kids learn what they live. Two of mine took up our “ant” philosophy, saving and avoiding debt, never paying less than total owed on all credit cards. One spent a decade as a “grasshopper”. Ran the cards up and made minimum payments and plugged ears and hummed when we pointed out the costs. We raised them all the same. It took a long while and a significant other who is responsible to change that kid…who is now fine.
My kids never had a study hall. Kids are graduating without being able to read and write as well. That to me is very scary too.
I’m not sure that adding burdens to the school system will help people better understand how to stretch meager earnings when those are lower than needed for shelter, food and other necessities, including saving for kids’ education and their old age.
I opened my own savings account when I was 12. I’m not sure why the savings and loan allowed me to do so, but they did. I loved the idea that they’d be giving me money for keeping my money safe and available for when I needed it. I saw how the interest added up & it made me very happy.
Most of my CCard statements state how much the total repayment will be and over how long if I make minimum payments. They never used to state that. I think it’s helpful for folks to see that printed out.
I’ve had CCards since I applied and got them in college. I always pay the balance every month and don’t pay late or finance charges.
Just as a school based anti drug program doesn’t stop drug use, a school based financial literacy program won’t stop people living above their means. This is a value, not a school issued lesson. The irony of using credit to build credit history is a problem. Talk about mixed messages, when the lesson is that you can’t afford credit unless you can afford to not need credit LOL. So those of us smug enough to benefit from all those paying 21% to Visa are just as much part of the problem as we model it’s use to our children.
We learned this in a Civics class in the 8th grade.
Isn’t this a life skill that people should be able to learn outside of school? Having said that I wouldn’t oppose more high schools offering a financial literacy course. It shouldn’t take more than a month or two for the most part no?
It seems far more important to me that schools teach this than most of what is currently taught. Most students won’t be using chemistry or calculus or french, but a much higher percentage will have their lives irrevocably altered by assuming student debt. That seems worth a semester course to me.
Yeah, one of my siblings got into that spending/credit card situation. Then decided that the solution to that problem was more income. The spending is kept growing, but in no way as fast as the income. That’s now the rich on in the family. Still outspends me, but can well afford to.
Is there really an epidemic? Is there data showing that things are worse than they used to be? Seems like there have always been ants and grasshoppers.
@roycroftmom My son agreed as well when I asked what he thought of this. I know our school helps all seniors fill out a FAFSA. They’ve also added in SAT prep course as an optional elective. I see no reason why we can’t offer a financial literacy class and I hope Texas embraces it. Our school district is 53% low income in a property wealthy city so our schools are very polarized. If parents aren’t even reading to their children to prepare them for school there is no way they are teaching them about financials.
Student debt is skyrocketing here. I was just studying the upward trend in Texas the other day reading a 90 page report on this and that was the conclusion as well. I can remember signing these loans myself -years ago - I had no idea what I was signing or what it meant - it was just necessary to go to college. It’s even easier now with everything being online.
I can see the need for a class explaining these topics and perhaps splitting time with budgeting and maintaining a budget.
Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.
Here’s everything you need to know on student aid, which includes loans (both grad and undergrad)…facts in this report will allow posters to support their statements.
I do think it is the parent’s responsibility to teach their children about finances. But, not every parent is good with money, not every parent has the time or resources. Also, not every parent is a good parent, I doubt abusive and neglectful parents are teaching their kids about finances. A single low income parent who works two jobs to support her children may be good with money, but probably doesn’t have the time. And high income doesn’t necessarily mean you can manage money well.
My kids learned a bit about finance in their Dynamics of Living class in 9th grade. Other then that they learned about fiances at home. We taught them to be frugal and to save and to have 6 months living expenses saved up for emergencies. We also taught them that credit can be good when used properly, but we also told them that sometimes it’s best to avoid credit if you can’t use it properly…
Probably those who live enough below their means to be able to save enough money for long term goals like retirement and kids’ college (at least being able to comfortably pay typical EFCs from FAFSA and colleges) are a small minority (and sometimes even they get derailed by things like medical bills, divorce, etc.).
What may be the case is that many parents are setting less optimal examples, such as living barely within their means (no money for retirement or kids’ college, and one medical bill or job loss away from a debt trap), or living above their means until they run out of borrowing capacity. Some may be unwilling to say “no, that is too expensive” to their kids until the reckoning comes with college costs (and maybe not even then, with willingness to co-sign $100k+ loans).
Re: 6 month emergency fund
Perhaps a better definition would be based on the length of time it will take to find a replacement job if job is lost. Since job loss tends to occur in recessions, the time needed to find a job in a recession should be a guide. Also, consider retraining time and cost in case your job is obsoleted.
It’s really sad reading the PARENTS writing about taking on $100k plus loans to go to OOS U so kiddo can have “full college experience.” How can one willingly and knowingly put themselves and their loved ones under a mountain of debt for undergrad?!?!? It’s hard for kids to see straight when parents don’t.
I did not read the whole thread so forgive me if someone else has already brought this up.
I teach math at a community college. One of the lessons I have my students do early on is to calculate different savings scenarios using a compound interest calculator. This is a light bulb moment for virtually all of them. The older students are often depressed. The younger students are motivated and all of them are annoyed that their teachers and parents did not REALLY teach them how the snowball effect of starting small savings early will make them financially secure later. Many tell me that if they’d have gotten it earlier, they would have stayed in college the first time, or passed on the new car, or paid more attention in high school.
Parents: PLEASE please find a compound interest calculator online (Bankrate has one and many other financial calculators) and have your kids run some different savings strategies. Don’t forget to also have them compare saving on their own vs finding a job with an employer match 401/403. When they get their first professional job encourage them to calculate the impact of socking away as much as they can now. I’ve got my 25 year old niece who only makes 45K a year tapping out her HSA, her IRA and her 401K. She’s eating mac and cheese every day and living in a modest apartment, but in a few years she’ll have some options in life that most of us would have loved to have when we were her age. (Don’t worry…she’s having plenty of fun too.)
My kids had some instruction on budgeting in school, but that’s it. I try to impart some wisdom/money saving strategies on the kids. It’s hard when their Dad has a very different way of handling money - he thinks in terms of opportunity cost, and since he’s never wanted for anything, he has no problem spending and rationalizing that he has gained by saving himself valuable time. That said, my son is getting an education right now about financial management as we discuss how college will be financed - opting to take a small interest loan rather than liquidating investments and incurring tax as well as foregoing compounded growth, etc. But I certainly hope and expect him to further his understanding of financial matters in college.
I feel very strongly that instruction in financial affairs should be an integral part of a good education. My Grandmother was a home economics major at Cornell. She was an absolute master at saving money and accumulating wealth. I was fortunate enough to be able to take accounting with the larger than life, iconic Hamilton College professor, Sidney Wertimer. It has served me very well.
Yes, I think we do have a financial literacy problem in this country and more instruction is absolutely necessary.
Gee… can’t be because the cost of tuition has far, FAR outpaced the general rate of inflation, can it?
I’m not convinced a high school course would do any good.
Balancing a checkbook? Who does that in 2019? Do you just mean making a budget?
I was raised by a banker but didn’t really understand budgeting until my dad became disabled and we started spending within government defined limits - food stamps, SSI, etc. I learned through trial by fire.
My friends who floundered the most wasn’t those who came from family with bad habits - they were from families where finances were secret / not something that was talked about.
I’ve honestly not had a budget that i lived with most of my life—we knew how much money we had, how much we had as fixed expenses and then just made sure to spend less than the remaining the amount.
My kids seem to manage their finances similarly. It works for us. The kids don’t use checkbooks much but always pay off in full before they incur any late fees or penalties every month.
