Parent College Coach Tip #58: Teach Your Teen Financial Literacy
With all the recent news about students signing petitions to have their student debt erased and opting not to pay their debt, I wonder what are we teaching our children? For students to think it’s perfectly fine to refuse to pay a debt, a debt that paid for their education, something has gone horribly wrong.
I agree. Student debt is crippling this generation of students. But instead of forgiving the debt, wouldn’t it be better to teach these students some basic financial literacy? Where is the disconnect? Did the parents not explain the ramifications of debt? Did the colleges not take the time to discuss repayment amounts and the consequences of borrowing too much to pay for college? I think both are at fault.
Should we be teaching financial literacy to students?
U.S. Secretary of Education Arne Duncan believes that financial literacy needs to be a staple of the American education system. Mr. Duncan likens financial literacy education to learning a foreign language in that it’s something that should be taught as early as possible.
“If our young people aren’t financially literate, we are part of the problem, not part of the solution. And as a nation, we have a huge problem,” Duncan said. He also noted that financial literacy is a topic that students find interesting. “This is a great way to teach math. Kids care about money,”he said. “Rich, poor, black, white; it doesn’t matter. This isn’t an add-on or extra (to the curriculum); this is a really interesting way to engage students.”
Why teach financial literacy?
If our students aren’t financially literate, they head to college without the tools they need to budget and have the proper perspective regarding student loan debt. According to NewsObserver.com, a study by the Michigan Retirement Research Center found that barely a quarter of 20-somethings understand basic financial concepts such as interest rates and inflation. A survey by the nonprofit group Jump$tart reported that financial literacy scores had plummeted to their lowest levels in 12 years among high school seniors nationally. Not surprisingly, individuals who are less financially literate are more likely to face higher overall debt, unfavorable mortgages, and large credit-card balances.
We teach our children to be polite, be honest, study hard, and set goals. It is time we teach them financial literacy. Make it a priority before your student heads off to college. Need help? Here’s an article I wrote for TeenLife Magazine: 10 Online Resources for Student Financial Literacy.Parents – Want more Parent tips? GET THEM HERE! Don’t forget to read all of the Scholarship Mom Tips here.