Great Summary of Issues in Financial Literacy Education

One of the best articles written about the challenges we face in training people to be competent in money matters.

I have believed for a long time that financial literacy education's failure to date is not about the content, as there has been enough written, produced and printed about the in's and out's of the world of money. But instead, it is an issue of delivering the training information to the right person at the right time in a form that will be most effective for them. Not such an easy task.

The article, by Tom Hanza, the President of the Investor Fund, needs to be read by all people interested in and working on the education of kids, young adults and seniors in money matters.

Raising I.Q.

So what does the ability to delay gratification have to do with IQ?

Richard Nisbett, a professor of psychology at the University of Michigan, in a superb new book, “Intelligence and How to Get It,” provides suggestions for raising kids IQ's:

• praise effort more than achievement
• teach delayed gratification
• limit reprimands
• use praise to stimulate curiosity

So one of the founding concepts in successfully managing money (learning how to delay gratification) has been implicated in higher IQ! And we all know — a higher I.Q. has been shown to correlate to greater success in life.

Now how is that for some new motivation Mom, Dad, Grandparents, Aunts, Uncles and any other money mentors our there — get out and start modeling, teaching or reinforcing the idea of delayed gratification.

Why Teach Your Kids About Money

If we are to start to share how to teach young kids about money, it makes sense to begin at the Why?

Here are a few reasons....

• To ensure that children build the necessary skills to make informed financial decisions in their lives.

• Training should start when children are young — by early elementary school age when money habits are already being formed

• Kids who learn to manage their own money early are on their way to becoming financially secure adults.

• Giving children the responsibility to earn, spend, save and share money helps build confidence and self-esteem.

• Kids who give to others will benefit from learning that life is bigger than one.

Do you have other reasons we should keep track of? Let us know.

A New Year's Resolution

Welcome to 2009.

If we ruled the world, it would be the year of educating kids in personal finance. But since we don't - how about if this blog serves as a place to get information, advice, and share tips, tricks and tools on how to teach young kids money skills?

Look for use to layout a simple plan to share what we know and we look forward to your comments, ideas and suggestions.

Welcome to the Year of the Money Smart, Wise, Savvy - Kid.

Teens Clueless but Confident!

According to a study by Schwab and written up on Yahoo! by Carrie Schwab Pomerantz, 73% of teens think they will earn lots of money when they're out on their own---maybe as much as $145,500. And 63% say they are knowledgeable about money management-- they know how to budget, save and invest.

But then the numbers start to look a bit more murky----13% say they know what a 401(k) is, 14% say they know how income taxes work, and 23% say they know what a credit score is. But when Jump$tart gave students a basic financial literacy test the average high school senior got a test score of 52.4%-- an F!

As we all know teens are often both a bit clueless and way over confident in their abilities and if you consider that less than 20% of teens have taken a course on personal finance and, in this era of predatory lending and self funded retirement plans (401(k)s, IRA, etc.) teaching kids solid money skill before they leave home is far more important than it's ever been before.

The State of Financial Literacy in America

I am deeply passionate about finding solutions to teaching our children important money skills and habits before they leave home to go off to discover their role in the world. How wonderful it would be if all kids could grow up to be money savvy adults!

We live in a world today in which each of us has the responsibility to learn about and actively manage our financial lives. While the importance of financial literacy as a basic life skill is obvious to many parents, educators and policymakers, how to develop the skills in our children remains a challenge.

In a nation where nearly a third of high school seniors already use a credit card, a higher proportion have an ATM card, and over a million families filed for personal bankruptcy last year, the need for personal financial literacy is apparent. Yet fewer than 30 percent of young Americans are given the opportunity to take as much as one week’s worth of coursework in money management or personal finance in high school--from the Jump$tart Coalition for Personal Financial Literacy 2002 Survey of High School Seniors.

Schools, who struggle with insufficient resources to deal with the large set of societal requirements--like No Child Left Behind, aren’t able to add money skills development to their curriculum.

Parents, who struggle with managing their own debt and planning for their retirement just want their kids to be armed with a level of financial literacy they did/do not have themselves.

And to make matters more complicated (as if they weren't already) parents also have a hard job in walking a fine line in teaching kids about money between overprotecting them from the realities of money and setting their kids up for a life long preoccupation with money as a source of power and well being.

So what can we do about it??