6.17 Personal Finance
At some level, personal finance is common sense and Ben Franklin-style self-discipline. A penny saved is a penny earned, right?
Sure, but in an era of easy credit, street-corner paycheck advances, and mass-marketed financial services with cute mascots, it is easy to become confused, or overwhelmed. Members of the middle class drive by some of the most discouraging parts of the financial service economy without even noticing it. As California Lt. Governor Gavin Newsom points out, “the nation has as many check-cashing and payday loan businesses as it does McDonalds and Starbucks Coffee stores combined.”
Strong personal finance habits can help today’s youth turn into adults able to support themselves and those they care about. Self-sufficient adults help the economy by contributing to economic growth. The reverse is tragically common. The role that most schools play in preparing students to understand and navigate personal finance is shockingly limited. Financial literacy is usually addressed in a combination of courses, for example math or economics. A financial literacy course might cover four general areas: Saving and Investing, Credit and Debt, Financial Responsibility and Money Management and finally understanding Insurance, Taxes and Real Estate Debt.
According to the Council for Economic Education, college students who come from states where there is a course required in financial literacy are more likely to budget, more likely to be saving, and are less likely to have maxed out their credit cards in the last year and are more likely to be paying off their credit cards fully every month.
Most jobs are created in small businesses, where basic financial readiness is a critical survival factor. Philanthropies exist to fill the gaps, and perhaps readers will comment to help draw attention to more of them.
- BizWorld.org is an example of an organization taking proactive steps to recruit and prepare future entrepreneurs. BizWorld inspires children to be innovative leaders through the teaching of business, entrepreneurship and finance.
- The National Endowment for Financial Education emphasizes programs in high schools located in low-income communities.
- The California Department of Education has collected a pile of links to organizations and services with an interest in financial education.
- Some of these points are presented nicely in an infographic from Edutopia.
This post concludes section 6: “The Right Stuff.” The next post begins our exploration of “The System.” The overall structure of Ed100 is this: Education is Students and Teachers spending Time in a Place for learning with the right Stuff and a System that $upports Success.
Thanks to Peter Kuperman for help with this post
