Money 101?

Do kids need to learn about handling money in school? Indications are that the answer is a resounding "Yes!."

In a recent article in my local paper, the Fort Worth Star-Telegram, consumer affairs writer Teresa McUsic cites a test by the Foundation for Financial Literacy in Houston that paints a scary picture of how much the typical high school student knows about handling money.
700 kids were given a test to gauge their financial literacy, with questions such as whether property and sales taxes are deducted from paychecks. The average grade was a dismal 48 percent correct.

Based on such information, the Texas Legislature is taking steps to add courses in money management to the Texas high school curriculum. Topics to be covered would include avoiding and eliminating credit card debt, the responsibilities of home ownership and renting, stock market investment and savings plans.

According to the article, seven states already have such courses: Alabama, Georgia, Idaho, Illinois, Kentucky, New York and Utah.

With consumer debt and bankruptcy at all time highs, it's clear that people need to learn more about how to manage their money, and they need to learn it early, before they get into financial trouble.

If you think classes in personal finance in high school are a good idea, contact your state legislature or school board.

Or start teaching your kids about finances yourself.

Once they get old enough to handle the necessary math, have them pay the bills now and then, filling out the checks (you'll look each check over and sign it before mailing) and subtracting each check amount from the total in the account. Go over a credit card statement with them, showing them the interest rate you pay, and how that translates into a monthly finance charge. And I strongly recommend that you do what my father did....make your kids pay for at least half of any major purchase they want to make, such as their first car.

Too grim? Not at all. If you help them learn financial responsibility in a calm, matter-of-fact way, as part of their becoming an adult, your kids will benefit for the rest of their lives.

Children need to know that handling money is more complex and more important than just expecting a never-ending supply from Mom and Dad. You teach your kids to look both ways before crossing a road; as they grow, also teach them the money-handling skills they'll need to keep from being financially blind-sided when they become adults.