In honor of Financial Literacy Month, let us talk about how important it is to teach our children financial literacy. The impact our finances have throughout our lifetime on the way we live is immense, that is why it's never too early to start learning about money. Since the 2008 financial crisis, financial literacy programs have skyrocketed. Schools are developing financial literacy curriculums and after school programs, while many non-profit and for-profit organizations are also taking this initiative.

Financial Literacy in Schools
Carol O'Rourke, Executive Director at The Coalition for Debtor Education, an independent non-profit housed at Fordham Law School, teaches financial literacy at city schools in New York through a game called Financial Jeopardy.

"We use a game show format, with categories like saving, banking, safety, and needs and wants to get the students engaged," she says.

Exciting Classes
They are expecting a boring class, says O'Rourke, not a lively discussion about if a cellphone is really a "need" or if a student loan is a good investment. The class is divided into teams, so everyone gets involved and it becomes competitive, with everyone vying to get the most points. The discussions are interesting to the students because they talk about the things that they spend money on now.

Credit Card Debt
The "2012 Financial Literacy and Credit Cards: A Multi Campus Survey," published by the International Journal of Business and Social Science found that 70% of undergraduate college students had a credit card and just over a third (33.9%) had only one credit card. This leaves approximately 36% of college students with two or more credit cards. However, according to the survey, only 9.4% of students paid their credit card in full each month, leaving most students (90%) with some indeterminate amount of credit card debt each month, subject to high interest and other charges. Given these troubling statistics, it's very important to teach children, while they're still young, to stay away from debt and show them the best ways to handle the money they receive from babysitting, delivering newspapers or any other part-time jobs that college-aged people tend to have.

The Bottom Line
Teaching children about financial literacy is very important if you want them to grow up to be financially responsible adults. Kids will take a greater interest in financial literacy if the topic is engaging and fun. However, nothing is more important than making open money conversations a regular part of their upbringing.

Related Articles
  1. Investing

    Where the Price is Right for Dividends

    There are two broad schools of thought for equity income investing: The first pays the highest dividend yields and the second focuses on healthy yields.
  2. Personal Finance

    How Tech Can Help with 3 Behavioral Finance Biases

    Even if you’re a finance or statistics expert, you’re not immune to common decision-making mistakes that can negatively impact your finances.
  3. Savings

    Should You Look at 529 Plans Outside Your State?

    529 savings plans are not restricted by geography. So if your in-state offering has high fees or poor investment choices, look elsewhere.
  4. Investing Basics

    5 Tips For Diversifying Your Portfolio

    A diversified portfolio will protect you in a tough market. Get some solid tips here!
  5. Entrepreneurship

    Identifying And Managing Business Risks

    There are a lot of risks associated with running a business, but there are an equal number of ways to prepare for and manage them.
  6. Forex Education

    Explaining Uncovered Interest Rate Parity

    Uncovered interest rate parity is when the difference in interest rates between two nations is equal to the expected change in exchange rates.
  7. Fundamental Analysis

    Using Decision Trees In Finance

    A decision tree provides a comprehensive framework to review the alternative scenarios and consequences a decision may lead to.
  8. Economics

    Understanding Tragedy of the Commons

    The tragedy of the commons describes an economic problem in which individuals try to reap the greatest benefits from a given resource.
  9. Investing

    4 Billionaires Who Dropped Out of Harvard

    People who became successful despite dropping out of Harvard University.
  10. Investing

    What’s the Difference Between Duration & Maturity?

    We look at the meaning of two terms that often get confused, duration and maturity, to set the record straight.
  1. What’s the difference between the two federal student loan programs (FFEL and Direct)?

    The short answer is that one loan program still exists (Federal Direct Loans) and one was ended by the Health Care and Education ... Read Full Answer >>
  2. Student loans, federal and private: what's the difference?

    The cost of a college education now rivals many home prices, making student loans a huge debt that many young people face ... Read Full Answer >>
  3. Can I use my IRA to pay for my college loans?

    If you are older than 59.5 and have been contributing to your IRA for more than five years, you may withdraw funds to pay ... Read Full Answer >>
  4. Can I use my 401(k) to pay for my college loans?

    If you are over 59.5, or separate from your plan-sponsoring employer after age 55, you are free to use your 401(k) to pay ... Read Full Answer >>
  5. What is the utility function and how is it calculated?

    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
  6. How does a bank determine what my discretionary income is when making a loan decision?

    Discretionary income is the money left over from your gross income each month after taking out taxes and paying for necessities. ... Read Full Answer >>

You May Also Like

Trading Center