Monday, February 25, 2008

Narrow economic inequality: Provide financial ed for all

Financial management is a skill is that many young people of this generation lack. Today, only 17 states require economic course in public schools as a graduation requirement, and most teens are unaware of the consequences of irresponsible spending. Educators are beginning to propose more financial education programs in schools across the United States. According to the the chief executive offer of the National Endowment for Financial Education "there's been a steady building in recognition that we need to give students basic financial skills." Although different organizations have been providing assistance on the education of high schoolers through interactive lessons, more effort is needed to assist kids to understand the concept of credit, loan, saving, and stocks. The national economy is heavily affected by financial choices people make. As a result, it is crucial for educators to teach teens about financial decisions.

The articles also points out that, "Many parents are unwilling or unable or uncomfortable about providing financial education to their own kids, or they've made mistakes themselves, or are part of the unbanked population." The lack of financial knowledge among lower class kids is a reflection of the theory of social and cultural capital. Without having parents that are well versed with managing money, kids from disadvantaged communities lack the knowledge needed to achieve greatly mobility. Because many parents do not expect their kids to be able to handle money well, their children find it hard to achieve financial independence in adulthood. People who lack such background really miss out on opportunities as well as economic success. Elites on the other hand, tend to do a better at teaching their children about investment and economic strategies.

A great way to narrow this gap is to provide financial education for pubic school kids. Instead of having people learn the hard way, funding of financial education programs is a small investment to make considering the potential benefit to the economy. Whether if it is accepting a credit card offer, buying a car, or opening a checking account, financial improvement comes from knowing all the options and consequences of different decisions. Curricula in economy will provide the much needed resources that lower class kids would otherwise not get.



Anonymous said...

School is meant to not only prepare students in terms of academic achievement, but also to give them preparation to function as a member of society. If students are not given the proper education to financially support themselves as adults, then the educational system has failed its students.

Femi Vance said...

I agree that financial education or financial literacy as it is sometimes called is desparately needed for two reasons. First, from my experience, it is difficult for low income students to see the connection between school and the real world. Adding a course on financial literacy would be one way to make a connection to students' lives outside of school. Second, for those students that go on to college, learning how to manage your money is critical. For many, college is a time full of major outlays and tiny incomes with credit card companies poised to strike. If students do not possess financial literacy it is easy to make mistakes that will have them paying (literally) for many many years after graduation.