Human Development 12/13

Psychology

Quiz 15 :
The Truth About Kids and Money

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Quiz 15 :
The Truth About Kids and Money

Financial education is vital from the school days. Kids must have knowledge about the financial transaction, they will need to survive and even thrive in the future. The younger generations must be aware about the concepts of debts, mortgages, investments and savings. There are various ways in which financial literacy can be taught in school. Students can be given role play or can directly be paid for certain jobs they perform in school. They can take task of attendance taker and blackboard cleaner and can be paid for the work. This way they can be taught tax calculations, and can learn the concept of interest compounded annually, in process of saving or borrowing. During pre-K and kindergarten, the children must be introduced the concept of value of paper in form of currency. They can be asked to put coins in piggy bank, or can be asked to sort the changes into pennies, nickels, dimes quarters. During pre-school, as part of school curriculum, children can be made to identify currency, name the monetary value, and make change. Children can be given allowance, from it they can learn to spend and save. During later part of pre-school, children can be taken to field trip to bank. The children can be introduced the concept of compound interest for both savings and loans. They can learn the concept of donation. During middle school, the students are targeted by The Great American Marketing Machine. Parents learn to fight against the unreasonable demands of children. The children at this stage must be taught that family have a budget system and anything beyond the budget is beyond the reach of family. The importance of saving must be inculcated. During high school days, children must be made to understand about good debts and bad debts. They must be taught the dangers of credit card interest. The financial education in school can focus on budgeting and planning, supply and demand as well as savings and compound interests. Student should get guidance on career front and entrepreneurship and be taught that income is an important part.

Financial education is vital from the school days. Kids must have knowledge about the financial transaction, they will need to survive and even thrive in the coming years. The younger generations must be aware about the concepts of debts, mortgages, investments and savings. During recession time, parents get laid off and some of them even find it difficult to get a job, many loose their house in foreclosure and community is suffering from financial downturn. The children of all the status poor or rich sees the impact of financial downturn. The children also suffer from financial woes, and anxieties about their families, their lives and dreams for higher education. The financial illiteracy results in many economic problems like subprime meltdown and the hedge fund implosion. These situations give an opportunity where children can be taught the basics of finance. The young kids should know the basic concepts like the fact that money has value, and value of saving. They should learn the difference between needs and wants. According to Sheila Miller, personal finance teacher, Newfound Regional High School, the children should be educated about budgets, good debts, bad debts, mortgages and income. Economic downturn gives kids an opportunity to learn finances. This will save them from the pain their parents experienced and the same the children do not face during recession.

Financial knowledge is vital from the school days. Kids must have knowledge about the financial transaction, they will need to survive and even thrive in the coming years. The younger generations must be aware about the concepts of debts, mortgages, investments and savings. The lack of financial knowledge can take a toll of your pocket. The same situation I faced due to half knowledge about credit card. This was the time when after college days I started a new job. In fascination I too owned a credit card and the bank will also offer you the card vehemently without letting you know the cons of owning it. I started using the card in an uncontrollable manner, without having full knowledge about annual percentage rate and late fines. It came a time when my credit card expense was more than my salary. The bank gave me a long statement of credit card along with late fees and interest portion. I was stunned seeing the figure. Actually, the two major drawback of credit card which was unknown to me was the interest portion calculation and late fees. The interest can drag you in debt deeper, if you do not pay the balance early. And if we miss the payment we have to pay a huge sum of late fine, that cost around $25 to $35. I then went back to the bank, queried the entire thing and tried to understand all the facets of having credit card. They suggested me to apply for a card with a 0% introductory annual percentage rate that gives time to pay the balance without racking up interest or pay before the due date to avoid interest or late fines. I then realized and made it a point that I will never go with any financial instrument without full financial knowledge of the same.

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