I don’t usually read USA Today, but one of the many blogs I read pointed to this article Millennials struggle with financial literacy, which calls for “financial literacy” instruction in high schools.
While I can see the need for high schools to teach some basics of consumer finance (like the monthly payments for different levels of debt and that college loans can’t be avoided through bankruptcy), I’m not sure how much it will help people avoid acquiring more debt than they can handle. People acquire debt to buy things they want or things they think they need. In both cases, few people properly weigh the future pain of too much debt against their current desires or needs.
As long as the credit card companies and banks make it too easy to pick up too much dept, people will do so, even given well-meaning advice in school or the mathematical tools to figure out just how bad the debt load will be.
Still it probably wouldn’t hurt for high school students to work through a free online consumer education curriculum like FoolProof, unless there is a strong bias to the material. I know that the home-school umbrella school that my son is part of had an “economics” course for high schoolers this year that I believe was mainly this sort of consumer financial education. My son did not take it, because he already had too many courses and the material looked like it would be too low-level and too slow-paced for him. Perhaps I should look for a quick tutorial on debt financing, budgeting, and investing for him to read, since he probably won’t have the patience for videos. Any suggestions from my readers?
I do wonder about how he will handle the transition to independent control of his money when he goes to college in a couple of years. Currently, he has a bank account but rarely spends anything—clothes, food, books, and transportation are things we usually buy for him, and he has not expressed much interest in other purchases (truthfully, he hasn’t expressed much interest in any purchases). I suppose if he lives in a dorm on a meal plan, he’ll have to control his money for book purchases and making sure that tuition bills are paid on time, but not much else.
Perhaps we should start putting him in charge of buying his own textbooks for his homeschool classes. The practice at searching for used copies and previous editions from multiple web sites will probably be useful for him. We can help him learn to identify warning signs for trashed copies, and he could watch the fluctuation in online prices of text books at the beginning of each semester (buying out of sync can save huge amounts on used books).