Friday, July 4, 2008

Testing Your Teen's Level of Financial Literacy

Our country's economic situation illustrates what happens when large numbers of people are financially illiterate and thus fail to live within their means. People bought houses they really couldn't afford using mortgages with payments that would increase dramatically over time. Worse, many also borrowed against the home equity that developed as the bubble inflated. Now, they're losing their homes because they can't make the payments, and the repercussions of so many foreclosures as well as the subsequent decline in prices are affecting the entire economy.

Lack of financial literacy is a real problem. Public schools have failed to teach kids about money, but more importantly, many students' parents have failed to teach them about money. It is our responsibility to take the time to teach our kids about financial matters while they're young, so they will make wise choices when they grow up.

That's what Life Prep for Homeschooled Teenagers is all about, and I'm thrilled to be using the curriculum again, this time with my third child. This past year, she worked through most of the reading list. This fall, she'll begin with the projects. Since she just got her first "official" job (beyond babysitting), it's the perfect time to do these projects, as she'll be able to use the financial principles she's learning in her daily life, now that she'll have a steady paycheck.

I was glad to hear that some parents are teaching their kids to be financially savvy. HSLDA reports that a homeschooled boy is one of the high scorers in this year's National Financial Literacy Challenge. If you'd like to be notified about the next challenge so that your own child can take it, sign up here.


Janet said...

I LOVE the idea of parents actually teaching their kids about REAL life stuff, like mortgages, budgeting, etc. Can't WAIT to get my kids into this.

Brumbemom said...

Barb, Did I already tell you this? Well anyway, I was getting my stuff ready for school this year,and I found your "Life Prep" book among curriculum that I had purchased a while back and had been waiting to use until my girls got older. I thought that it was pretty cool to find it now and realize that the author is now a "blog buddy". I am excited about getting into it.

Miss E said...

Barb, great job. I just finished a great book you may want to promote to your readers called The Ultimate Allowance. It's an amazingly powerful teaching tool as well to help prepare kids to make, manage and multiply their money wisely.

I've been offering financial literacy camps called Camp Millionaire (formerly The Money Camp) since 2002. It's a great 1 week program that uses a fun game to teach kids and teens (and their parents) how to 'win the money camp.'

Barbara Frank said...

Janet, the beauty of homeschooling is that we have the time and the inclination to teach our children the important stuff!

Brumbemom, let me know how it works for you :)

Miss E, thanks for sharing that. I do worry about the millionaire concept, though. I don't like to push greed, just financial common sense.

Miss E said...

One of the things we teach in our camps (kids and adults) is that having money doesn't mean you are greedy. Just the opposite is true actually. Most wealthy people have donated and helped those who need help than governments ever thought about helping.

The other thing is that children these days are going to have to be millionaires to retire with a decent living when they are older. The word Millionaire used to make people cringe (if you had a belief that having money made people greedy) but not so anymore.

The principles we teach in our programs, and in my book, is that rich people are rich, and poor people are poor and that with more money coming in every month than you need to live the lifestyle you choose, you can go out and do a whole lot of good with the extra if you choose.

Renae said...

I'm making a note of this for the future. This is such an important subject to understand. We cannot be good stewards unless we know how to handle our finances, and the sooner it is practiced the easier it will be when the pressures of life arise.

Peace to you,