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Failing Personal Finance? MAG
Dear Ms. McAdory, You areexcelling in your academics, which is clear from your 3.8 GPA, astonishing foryour first year of college. Your hard work and dedication have earned you a Medalof Most Improved this season in soccer. Your participation in variouscommunity-service projects is well regarded. All these achievements areimpressive. However, we regret to inform you that errors in your tuition paymentsobligate us to proceed with your dismissal. Please be ready to depart thisFriday.
The Department of CollegeCounseling
Expelled for bad credit? This scenario actually happened to thedaughter of credit counselor Julie McAdory. She was forced to drop out of collegeto pay off her credit-card debt. If you can't imagine how the daughter of acredit counselor got herself into such a situation, keep reading.
Yourhigh-school curriculum is the foundation of your college education, but a basicsubject that teens need to learn about is left out - money management. Based on asurvey I conducted at surveymonkey.com, not one teen learned about personalfinance at school.
Some parents give their teens a lot of money. Accordingto cardweb.com, teens spend up to $200 billion a year! One-third of high-schooland college students use credit cards, and almost a third of these have rol-overdebt month to month. Whether it is cash, debit cards or credit cards, teens donot always know how to handle big or unlimited amounts of money. About 30% of theteens I surveyed have never been taught about money by anyone.
Think of acredit card as a cake - it is something that many teens want or like. If you givea teen a cake, he will devour as much as his eyes can see. But in a few minutes,he will have a stomachache. If you give a teen a credit card, he thinks of it asaccess to unlimited money. A few months later, he will have terrible debt. Likethe cake, you should serve the money in bite-size pieces so he can learn tocontrol how much he spends under a parent's supervision.
But what happensif the parents have a gap in this knowledge? Personal finance is not oftendiscussed. A problem occurs when parents do not know how to manage their ownmoney and teach children bad habits. Naive teens will follow their parents'footsteps.
If students cannot learn from their parents, who can they turnto? School. Personal finance should be taught at school so that teens can learnhow to manage money from qualified teachers. By using a money-saving approach,teachers can show teens the most efficient ways to manage money. The teens willlearn the consequences without having to make the mistakes.
Ignorantcredit-card users can ruin their credit ratings without understanding why or how.It is important they learn since the consequences can be severe. Slightly lessthan good credit can hinder one's loan application for school, a home, or causefamily problems. Trial and error is the most expensive way to learn.
Now,you may be wondering if teens can handle this confusing subject, but think aboutwhat they are learning right now. If teens can study Latin and quadraticequations, they will be able to grasp balancing checkbooks and multiplyinginterest rates.
Is there time for a new class? Some children spend eighthours a day in school and adding yet another class may seem absurd. But teachersdo not need to add a class. Instead, they can incorporate financial educationinto the existing curriculum. Jump$tart Coalition for Personal Financial Literacyis a nonprofit organization that teaches personal finance. Dara Duguay, itsexecutive director, tells how: "[In math] if you're teaching how to add andsubtract, you add and subtract a checkbook. If you're teaching how to multiply,you teach interest rate calculations."
So, parents, please, takeaction. There is no need to be on the board of education to have a say in whatchildren learn. Schools will listen to parents' requests, claims McAdory. Shebecame involved after her daughter's terrible situation, writing to statesenators and giving speeches at schools. "When I used to make presentationsto high-school students, they would sleep," she said. "They don't sleepanymore ... because half of them have credit cards and don't know how to usethem" (Bankrate.com).
Personal finance is something that must, mustbe taught. With a few adjustments to the curriculum, schools can provide asolution to this need and teach it in the proper way.