“Financial Literacy in Schools a Social Imperative”
Posted by Nancy Phillips on Tue, Oct 05, 2010
Yesterday in the Globe and Mail newspaper there was an entire section devoted to financial planning because this week is “Financial Planning Week.”
One of the articles titles “Teaching Financial Literacy in Schools a Social Imperative” is a topic near and dear to my heart. I believe this is truly a global need, all children deserve to have the tools they require to fulfill their dreams.
The lack of financial education can have catastrophic effects on a family and painfully millions of people are currently going through this stress all over the world. Ms. Lovett-Reid, Vice President, TD Waterhouse Canada Inc. states “The attitudes and behaviours of parents have a huge influence on their children’s financial life. Canadians are living beyond their means, and if children see their parents being consumption oriented, it’s natural for them to fall into the tendency as well.”
Stephen Rotstein, Vice President, Policy and Enforcement, Financial Planning Standards Council, commented on the importance of starting young. “Financially literacy is a life skill, ideally developed at a young age…before detrimental financial behaviours are instilled. The earlier children are taught, the more they can improve on these skills and perfect them as they grow older.”
When you think about the implications of teaching financially literacy in school, it is really quite exciting. The effects would be profound. If good money managment and spending habits were established at a young age, the teenage years would be infinitely different for both the parent and the child. Whether they were inspired to save for their education, starting their own business or buying a piece of sports equipment, the teen would have specific goals which they were determined to achieve, and they would do so. This would increase their confidence and likely increase their desire to learn more and set bigger goals for the future. Their would be less negotiations and challenging discussions over money between parent and child.
Families would be able to discuss money topics more easily because it would be a regular part of daily life. The negative undertones around money, that often move through generations, would finally disappear so new skills could be learned. Children would be able to learn their lessons while there is very little risk if they make a bad decision. Mistakes are lessons that need to be learned and it would be much better for the child's well being if those mistakes are made when they are young as opposed to the devastating mistakes that many college and university students are making, especially with credit card debt. We all learn best by "doing" and by repetition, so if we begin teaching our children good habits when they are young, we will give them a real advantage when they are adults.
Our children would be more likely to grow up to be financially independent adults who could successfully take care of their children and teach them the true value of "things." Achieving financial independence should, I believe, be a primary goal for young adults. If financial literacy was taught in school, personal financial management would become a lifelong skill and would be approached in a positive way, not avoided as it is by so many people nowadays.
If young adults are not buried in debt, they will be much more likely to pursue their passions and find work they love to do instead of just finding something that pays the debt bills. If our young adults are inspired and fulfilling their dreams, this will have an enormous impact on our society through increased innovation, financial stability, decreased crime and increased health and happiness.
Let's make it happen soon, it will benefit us all.
The Zela Wela Kids Build a Bank book