Wednesday, January 20, 2010

Teach Your Kids About Money Because The Schools Don't

I learned a great many things in high school, and to this day I applaud the teachers at my suburban public school that really gave me a culturally aware education. I think it was because most of them were young and went to college in the 1960s. Let's face it, you learned lots of liberalism at NYU or Columbia in those days---and that often was not a bad thing.

In high school I learned all about how the Iroquois Indians made baskets out of willow bark before the time Columbus was born, and the secrets of ancient Japanese calligraphy and how to write the numbers one to ten in a 1,000 year old language, and how native Aborigines go on walkabout to earn their manhood, and all sorts of wonderful facts and details about an infinite number of subjects from art to science to history and more.

VERY interesting stuff, but not exactly practical when you graduate from high school and need a job and money to pay a college tuition bill or pay rent, or buy clothes and food for that matter.

American public schools teach the arcane and the trivia of human endeavor brilliantly. You learn a great deal for sure. A gold medal performance, and I'm being totally sincere.

Unfortunately you don't get a grasp on what you really need to do once you toss your graduation hat in the air and senior year is over. THEN WHAT?

You see, you don't learn about personal finance in high school because no one teaches it to you. Parents don't sit down their kids and teach them the difference between a stock and bond, much like they don't spend much time teaching the birds and the bees. The schools don't teach personal finance. Trust me when I say that kids chugging beer down behind the local 7-11 don't talk about FICA scores. You can sure learn a great deal about sex under the Broadwalk at Coney Island but no one really learns about mortgages and trust deeds there.

To me this is common sense. You want people to be good citizens, to work hard, save and invest their money, and become economically successful and self-sufficient. Society certainly wants this. All individuals except the most wacko want this. And so does the government even if it is just to create a new generation of taxpayers with jobs and off the dole.

So why not teach subjects like this in school in some sort of public civics or economics class?

  • How to write a resume
  • How to balance a checkbook
  • How to buy stocks
  • The magic of compounding interest and how the average 17 year old kid could be a millionaire by the age of 40 (their parent's age?) if they would just start saving now
  • How to lease an apartment and how to buy a house
  • Budgeting and saving for cool things like cars, motorcycles, trips to Amsterdam with girls
  • What is credit and how to get a good credit rating
  • All about credit cards and how to handle them. (Check out how bad the current system is doing here by reading this)
  • What is insurance, why you need it, and how to get it as cheap as possible
Perhaps you get the idea. Basic personal finance stuff. But super important because most high school kids don't manage a family budget, or pay bills, or make IRA and 401(k) contributions, but adults five minutes out of high school actually often do.

I know I did. Isn't that really what happens when kids go off to college? Or get a job after graduation? Or join the Service? Even kids that sleep on the sofa in their mother's house have a personal finance budget.

I wish my high school would have taught me about these things IN ADDITION TO all that great stuff about the Thirty Years' War and the Holy Roman Empire, what is the mass of an hydrogen electron and how to measure it, or who composed the 1812 Overture and why.

Yes, sometimes the practical is boring. YAWN. ZZZZ. Especially to 16-year old minds surging with hormones. Nuts and bolts and numbers and dry text instead of lots of pretty pictures of the African plains or Mount Everest. Pie graphs and bar charts instead of cuddly panda bears or cute newborn penguins.

But practical gets you work when you have bills to pay, and let's you go to college when your parents did not, and buy a home instead of forever renting, and build an emergency fund that gets you though the rough times, and let's you get a nice car that runs instead of a junker with no brakes that stalls at every light.

The practical can be made fun to teach and learn. And who doesn't want to learn how to make money?

Sometimes you just gotta be practical and when your 17-years old and on your own for the first time, yes, practical sounds good.

A word to the wise. If you are an investor, or a homeowner, or a small business owner, speak to your kids about money. I bet if you could go back in time you would handle a great many of your financial decisions differently. Do you kick yourself for all the money you wasted on dumb things (or people) that are long gone?

Well, save your kids from learning too many hard lessons about money. If you don't, who will?

Robert J. Abalos, Esq.