What Schools Should Be Teaching Kids About Money (and aren’t)

kis and moneyThe school day is relatively short, so it’s natural that some subjects will get less coverage than others. But the financial education of children has often been sorely lacking, with teachers leaving it up to parents to teach the fundamentals of how to save and spend safely. With the rocky economy we now find ourselves in, it is more important than ever that kids are taught how to be financially self-sufficient. Here are the three things we think they should be teaching about money in schools, and how you can help your kids in the meantime.

 

Not all savings are the same

ISAs, Bonds, Instant Access Savings, Notice Accounts… Even as an adult the choices can be confusing. So why are we suggesting these tricky concepts should be introduced to a child? Because when the Channel 4 programme SuperScrimpers asked people on the street, many had not even heard of ISAs, let alone knew the differences between each version. We’re not suggesting your kids should have an in-depth knowledge of each savings account, simply that they know they have options.  And if you sit down with them next time you’re thinking about changing accounts, and talk them through what you’re doing, they will quickly learn how to go about researching their different choices.

Money doesn’t just come out of the Hole in the Wall

There was once a little boy who wanted a new toy. He asked his mum but she said she couldn’t afford it right now. The little boy thought about this for a moment, and then piped up happily, ‘we can just go and get some from the hole in the wall’.

What’s the lesson from this tale? Well, firstly it shows that kids are exceptionally optimistic. But more importantly it reveals the lack of awareness often shown by children about where money comes from. And the problem is growing rapidly due to the onset of credit and debit cards: teachers have reported that those kids whose parents pay predominantly by card are less aware of the value of money than those whose parents still hand over notes and coins.

Once they’re old enough, encouraging your children to take a part time job is one of the best ways to teach them where money comes from (and they will soon see how quickly it can be spent). But to help earlier on, make sure they are introduced to physical money, and talk with them about where your earnings come from. Even playing with the fake money in board games can be educational, but as you play, please remember…

Saving all your money isn’t always the answer

Don’t get us wrong; encouraging a savings habit is hugely important. But growing up with the constant message that you can never touch your money can be just as harmful as the idea that constant spending will fix everything. Some people have been known to save and save, whilst never feeling they could actually spend any of their hard earned cash. Such an attitude can encourage stinginess and create continual dissatisfaction with what you already have. A controlled spending habit, where you set boundaries and create goals, is one of the best ways to foster a healthy attitude towards money.

Are there other key lessons you think schools should be teaching kids? Let us know below.

Making Finance Fun in Primary Schools

Here is an article recently published in Primary Teacher Update exploring how primary teachers can teach younger children about money.

Please share with your colleagues and feel free to leave your comments below:

Financial Fun in Primary Schools

10 Reasons Why Money Skills Should be Taught in Schools

We all know that schools are supposed to teach reading, writing, and arithmetic, but what about the ability to handle money? With more Americans in debt now than ever, it seems to be logical that students be taught more than just who is on the money. Below, we have gathered a list of ten reasons why money skills should be taught in schools.

1. Too much debt – As noted above, more and more Americans are faced with more debt than ever. This can include house payments, student loans, bank loans, and much more. Having too much debt can cripple a family or individual and should definitely be taught in schools.

2. Credit cards – Another way people pile up so much debt is through the lure of credit cards. By promising a big rush now, consumers often run up their limits within a period of months and can spend years paying it all back. Teaching how credit cards really work, along with the topic of compounded interest, can give the kids a truly valuable lesson.

Perhaps you could use this credit card calculator to show them how long it would take to repay a credit card.

3. Bankruptcy – Other than paying debt off, bankruptcy is another way people get out of debt. Not only does bankruptcy carry a high penalty for those filing for it, it is also bad for the economy as a whole.

4. Foreclosure – If you own your own home or are making payments on it, getting too far into debt can put your biggest investment at stake, your home. This is doubly so for people who take out a second line of credit on their house and is taught too little in schools.

5. Retirement – It may sound like a far off time for your students, but having a retirement plan is never a bad idea. Having teachers explain why saving for retirement can be a good and rewarding thing.

6. College – This major event will come as soon as students are done with high school. Teaching kids about money will better prepare them for the world of college where everything from tuition to toilet paper can be an expense.

7. Budget planning – No matter what age the children are, if they can count, they can make a budget. This includes having teachers give children an imaginary income, family, expenses, and having them plan out what they want to spend on what.

8. Investing – Older children can take on this challenge. Have the children invest an imaginary amount of money in a stock. Then have them check it daily to see how much it rose and fell.

9. Taxes – No matter what your students go on to be, they will have to pay taxes on it. Have the children fill out mock 1040 forms to see how much they will pay in taxes, social security, etc.

10. Saving – One of the most important money skills ever, kids see far too much of celebrities flashing their cash and too few who save money. Teaching them the pro’s and con’s of each will give them a good foundation in the future.

Holly Kearny manages the site Teaching Degree. Her site helps students find the right college to get a teaching degree.