Economic Literacy

by Ken Vincent, Featured Contributor

ACCORDING TO the Council For Economic Education fewer that 20% of grade school and high school teachers feel competent to teach economic and money management courses. The council also says that only 6 states are making solid headway in improving that situation. Those states are Colorado, Texas, Georgia, Missouri, Michigan, and Delaware.

financial literacyWhy is that important? Well, it seems that parents have, for the most part, abdicated any effort to teach such subjects at home and have delegated it to the school systems.

Now teachers need to be taught how to invest, how to evaluate risk/reward issues, the different types of investments such as stocks, bonds, IMFs, CDs, commodities, etc. In addition to that venue, they need training on personal money management issues such as computing compound interest rates, managing checking accounts, and such.

The fact that few young people are educated in such matters is supported by the rapid rise in the use of prepaid debit cards. It seems many of the young find it easier to use them than to worry about bank fees, balancing check books, and running the risk of being overdrawn. An extreme example of the lack of understanding is demonstrated by the person that, when seriously overdrawn said,

I must have money in the bank because I still have checks in my check book.”

Some colleges and universities are now offering courses in money management as a way to stop gap this omission in earlier education.

So, where do you think the responsibility for this type of education lies? Parents, grade school/high school, college, employers?


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Ken Vincenthttp://sbpra.com/KennethVincent/
KEN is a 46 year veteran hotelier and entrepreneur. Formerly owned two hotels, an advertising agency, a wholesale tour company, a POS company, a leasing company, and a hotel management company. The hotels included chain owned, franchises, and independents. They ranged in type from small luxury inns, to limited service properties, to large convention hotels and resorts. After retiring he authored a book, “So Many Hotels, So Little Time” in which he relates what life is like behind the scenes for a hotel manager. Ken operated more that 100 hotels and resorts in the US and Caribbean and formed eight companies. He is a firm believer that senior management should share their knowledge and experience with the next generation of management.
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Sean
Sean

It needs to be a collaborative effort.

Parents are busy and it is far to easy to through money at extra curricular activities instead of requiring children to dig into their birthday or Christmas money to contribute. Or require children to get a small job to supplement costs on extra curricular activities.

By not requiring the child to participate in the cost, they, we, are missing a great opportunity to begin teaching our children about economics and the value of a dollar. By not requiring our children to work, we are also not teaching them about wealth creation. (Not material wealth but how a unit of money is created)

Kids are busier today with sports, volunteering and school clubs. Schools require a certain amount of volunteer hours in order to be eligible for National Honor Society. A better approach to this may be to accept a balance of volunteer hours balanced with a certain amount of work hours. Parents need to chip in and demand that their children use money earned on minor necessities at worst or all required contributions to sports, clubs, school related travel etc. When people, adults and children alike, begin spending their own earned income, their values change and thought process drives it.

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