The State of our Teen Financial Education
When so many agree there is a strong need for teen financial education, why are personal finance classes rarely offered in school? We spend sixteen years educating kids to get a job or career. None of those focus on teaching teens how to manage their money to reach lifestyle goals.
One 2015 study by the Center for Financial Literacy found that there are eleven states in the U.S., California included, that have few requirements, or none at all, for personal finance education in our high school curriculum. I confirmed similar findings in my local school districts here in California.
According to a new assessment of financial literacy from the Organisation for Economic Co-Operation and Development (OECD), one in five American teens fail to meet the level of financially literacy.
In contrast, The National Financial Educators Council (NFEC) asked 8,633 people in 3 separate surveys, “What high school-level course would benefit your life the most?” Respondents chose money management over all other classes combined.
Teens are an Underserved Niche
The issues young adults face include:
- sky-rocketing student loan debt
- credit management issues
- a tight housing market (in areas such as the SF Bay Area)
- little to no savings
- little to no retirement investments
Since financial education is not taught in schools for the most part, where do we learn about money? In most cases, we rely on our parents or friends to teach us. We often learn by trial and error or rely on salespeople.
Furthermore, Financial Advisors often have minimum portfolio values. ROP Programs focus on vocational pursuits. Junior colleges focus on graduating students with Associate Degrees, very few of which include personal finance. Banks and credit unions, while legally obligated to focus on financial education, rarely produce live courses or counseling for teens.
What Can a Parent Do?
There are several things a concerned parent can do to give their kids a head start on personal finance. Even if not “good” with managing money, or comfortable talking about money, here are a few ideas:
1. Open a savings account for your child. According to personal financial reporter Kelli Grant, ‘Financial literacy experts say that hands-on money management experience is key for financial literacy.’ The most recent PISA financial literacy survey found that teens who had a bank account scored higher than those that did not. The Programme for International Student Assessment (PISA) is a triennial international survey which aims to evaluate education systems worldwide by testing the skills and knowledge of 15-year-old students. To give your child banking experience, expose them to financial terms and help them learn how to save, a savings account is an easy way to start.
Teen Financial Education Courses
2. Enroll them in a Teen Financial Education Course. Look for programs presented at your
local library or community centers. Some local credit unions and banks occasionally offer classes. Financial Education Advocate groups also organize and offer live community classes, such as this one by The Money Boss. There are many online course offerings as well. Biz Kids is a free online resource from PBS appealing to kids teaching kids via video.
3. Play Together, Learn Together. There is a wealth of knowledge and financial concepts to master simply by playing financial games together. On family game night, include Rich Dad, Poor Dad’s Cash Flow Game or Monopoly. These are family classics that are fun, and do not seem educational. Pinterest has many free ideas, some with printable games. Jump$tart Coalition has an extensive list of resources to teach and play for a variety of ages.
What other ways do you support your teen with their personal finance education? Comment below!