Sunday, October 21, 2012

Should the new math be financial literacy?

Regardless of which side you fall on when it comes to the math wars, most will agree that many students leave high school, and even college, unprepared to handle their own finances. Some would agree that we have become distracted with the potential ability of math to predict future academic success or support critical thinking? In the meantime, we have lost focus on preparing young people for what will matter in their real lives. If the education system were to provide some financial literacy classes for kids, it could make a tremendous difference in the economic success of society.

Why it Would Help
If the educational system provided financial literacy classes, it could change the way that people operate later in life. People would be know how to save money, how to invest, and how to avoid debt. If more people were able to hold onto their money, society would be much wealthier overall, which would lead to fewer problems.


Helpful lessons
Financial literacy courses that provide background on simple financial matters would make a positive difference in the lives of students. Here are some important areas of focus:

  • Investing
    Provide a basic understanding of investing and how it works. They don't necessarily have to know how to pick stocks or mutual funds yet, but having a basic overview would be helpful. For example, show them the power of compound interest, and how regular investing can help them take advantage of it.
  • Credit Cards
    Educate young people on how to use credit cards responsibly. For example, they should understand how to find the lowest interest credit cards, so that they don't have to pay that much for interest charges. They should also understand the average credit card debt of each household. This way, they can avoid getting into debt problems when they get a little older.
  • Financial games
    Traditional games like Monopoly, Pay Day and video games like RollerCoaster Tycoon allow students to role play possible real-life financial scenarios. Embeded in this can be lively discussions and lessons on what decisions make the most sense.
  • Entrepreneurship
    When we help young people tap into their passions and provide them with entrepreneurship opportunities, many financial literacy lessons fall into place.  For example they can consider how much to charge for services, where and how to invest money, profit/loss, etc.  

Providing students with a financial literacy education prepares young people to be more secure and when they get older. While money isn't everything, having a grasp of basic financial matters can make a world of difference in the lives of students.
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