We all know that schools are supposed to teach reading, writing, and arithmetic, but what about the ability to handle money? With more Americans in debt now than ever, it seems to be logical that students be taught more than just who is on the money. Below, we have gathered a list of ten reasons why money skills should be taught in schools.
1. Too much debt – As noted above, more and more Americans are faced with more debt than ever. This can include house payments, student loans, bank loans, and much more. Having too much debt can cripple a family or individual and should definitely be taught in schools.
2. Credit cards – Another way people pile up so much debt is through the lure of credit cards. By promising a big rush now, consumers often run up their limits within a period of months and can spend years paying it all back. Teaching how credit cards really work, along with the topic of compounded interest, can give the kids a truly valuable lesson.
Perhaps you could use this credit card calculator to show them how long it would take to repay a credit card.
3. Bankruptcy – Other than paying debt off, bankruptcy is another way people get out of debt. Not only does bankruptcy carry a high penalty for those filing for it, it is also bad for the economy as a whole.
4. Foreclosure – If you own your own home or are making payments on it, getting too far into debt can put your biggest investment at stake, your home. This is doubly so for people who take out a second line of credit on their house and is taught too little in schools.
5. Retirement – It may sound like a far off time for your students, but having a retirement plan is never a bad idea. Having teachers explain why saving for retirement can be a good and rewarding thing.
6. College – This major event will come as soon as students are done with high school. Teaching kids about money will better prepare them for the world of college where everything from tuition to toilet paper can be an expense.
7. Budget planning – No matter what age the children are, if they can count, they can make a budget. This includes having teachers give children an imaginary income, family, expenses, and having them plan out what they want to spend on what.
8. Investing – Older children can take on this challenge. Have the children invest an imaginary amount of money in a stock. Then have them check it daily to see how much it rose and fell.
9. Taxes – No matter what your students go on to be, they will have to pay taxes on it. Have the children fill out mock 1040 forms to see how much they will pay in taxes, social security, etc.
10. Saving – One of the most important money skills ever, kids see far too much of celebrities flashing their cash and too few who save money. Teaching them the pro’s and con’s of each will give them a good foundation in the future.
Holly Kearny manages the site Teaching Degree. Her site helps students find the right college to get a teaching degree.
