Teaching Financial Literacy At Home And School

In between working on my taxes and tomorrow, which is the start of Financial Literacy Month, I’ve been thinking about financial responsibility.

Whether it’s personal financial stability or business planning, having a budget is usually a first step. But too many of us don’t even budget. The 2012 Financial Literacy Survey by the National Foundation for Credit Counseling discovered that 56 percent of adults said they did not have a budget for managing their money.

So, not surprisingly, forty percent admitted they have no idea what they’re doing and gave themselves a C, D, or F on personal finance . Many are now saving less than they did a year ago, and few have any non-retirement savings.

People should learn to be more financially responsible; that’s an easy answer. Teach them in school. Imbed it into their everyday curriculum – make financial literacy part of math and reading material.

But even the teachers today, who we ask to teach the financial basics, don’t get it and aren’t doing it. Only 11 percent of teachers, according to the National Endowment for Financial Education (NEFE), have taken a workshop on teaching personal finance. And more than 60 percent said they “don’t feel qualified” to teach financial management.

Teachers are, after all, just like everyone else – they aren’t setting budgets and, by their own admission, would not earn good personal financial literacy grades. That doesn’t make them bad, it makes them like the rest of us.

In many cases, communities rely on banks and other local organizations which come to schools and teach financial management basics such as budgeting and saving. And while that’s a great thing, it’s not enough.

We clearly need to do more. And earlier.

I’ve had this discussion with my kids – three well educated millennials who are starting on their own paths to financial independence. Helping them figure out how to manage their resources and make prudent decisions reinforces how big the challenges are and how important the information is.

I also serve as a member of President Obama’s Advisory Council on Financial Capability for Young Americans and the President has asked us to work on ways to deliver financial knowledge to young people – leveraging technology to reach young people at school, home or wherever we can.

For example, as the President of an organization that provides entrepreneurship education for disadvantaged youth, I know that talking to young people about starting businesses and earning money is exciting and empowering. It’s also a great way to teach core concepts of math and, yes, financial building blocks such as budgeting.

Practicing success and adaption in a market economy is the ideal laboratory to observe and perfect financial literacy.  For the young people in our classrooms, teaching these students how to make a dollar is the perfect lead in to what to do with that dollar – how to save it, invest it and spend it wisely. It’s one way to make financial information stick.

There are plenty of out of school, everyday opportunities as well.

Here’s one. If you haven’t done your taxes yet and you have school-age children, do it with them. Let them see how money is managed and spent and what saving and spending over a year or means.  Modeling good behavior – even in tax season – is a good habit.

And who knows – maybe reviewing your own financial records with your kids will motivate you to do better this year.

However we do it, we’re all invested – like it or not – in making sure everyone does a better job managing their dollars and cents because the global economy is more and more connected every day. It’s not just about Wall St and Main St anymore. As wireless banking spreads across the globe, for example, we’re all literally banking that a young entrepreneur in China understands budgeting basics.

And closer to home, whether you’re working for a business or starting one, it’s always a good time to improve your financial literacy IQ. April is an especially good time. All you need is a desire to learn and an Internet connection – search “free financial literacy tools” or use the President’s Advisory Council on Financial Capability “Money as You Grow” program.

With April 15th looming, thinking about finances in April can be grim. But it doesn’t have to be if you invest in yourself and do some financial planning.