McLEAN, Va. (8/22/11)--Starting this fall, Virginia high school freshmen will have to complete a one-credit personal finance course to receive their diplomas. Virginia joins a handful of states, including Missouri, Utah, and Tennessee, that mandate a class in financial education (USAToday.com
Aug. 14). Similar legislation has been introduced in Maryland, while several states require teachers to weave personal finance lessons into existing coursework. Combined with grassroots efforts by nonprofits and financial institutions, it’s all a part of a nationwide push to keep Generation Y members from making money mistakes that could haunt them in the future. Students aren’t the only ones facing a steep learning curve. More than half of teachers surveyed say they feel unqualified to teach to their state’s financial education standards, according to a study by the University of Wisconsin-Madison. Parents, too, are afraid they’re not good enough financial role models to educate their children (SmartMoney.com
Aug. 14). In other cases, parents assume that staying quiet about finances protects children; on the contrary, researchers warn, the fear caused by recent economic downturns among young people lacking financial experience could produce a generation less willing to invest or save. While incorporating financial literacy education into schools is a great start, the work of teaching a generation rests heavily on parents. Some 42% of Americans say they get most of their financial knowledge from their parents. As financial role models, parents should take these steps:
* Talk about finances. Simply explaining where money comes from and how it is spent is a good start for young children. Older children will need more details, like how to balance a checkbook and how credit cards work. * Start with what you know; make the rest a learning adventure. If you think your financial understanding is insufficient, build on your knowledge and your child’s knowledge by learning about money together. That kind of activity strengthens the entire family’s financial power. * Get active in your community’s financial education. Take advantage of financial literacy resources through credit unions, schools, or other organizations. If your community lacks in this area, advocate for financial education in schools, parent groups and other community organizations. Ask the staff at your credit union what financial literacy help it offers.
For more guidance, watch the video “Talk With Your Children About Family Finances” in the Home & Family Finance Resource Center