As states ramp up financial literacy education requirements, teachers can use technology-based tools in their personal finance lessons.
It's a lesson that everyone needs to learn: how to manage money. Yet until recently, most states did not require any financial literacy education. But in the wake of a turbulent economy and a student debt crisis, some states have changed the status quo. Four states require students to complete a one-semester course devoted to personal finance in high school, according to the Jump$tart Coalition for Personal Financial Literacy for kids, and several have legislation for similar requirements in the works. Julie Felshaw, an economics and financial literacy specialist with the Utah State Office of Education, says that financial literacy education is important because as students graduate from high school, they are stepping into adult roles with adult responsibilities. Students in Utah are required to take a one-semester financial literacy course, but pending legislation could create some of the toughest financial literacy requirements in the country. "The decisions they make early on are going to affect their financial well-being as adults," says Felshaw. "They can get themselves into financial difficulties early on and it could take a very long time for them to restructure their lives and get back on track." Brian Page, who runs FinEdChat, a blog featuring K-12 financial education tools and resources, agrees that financial literacy education is essential. "We can't claim to be preparing students for the 21st century if we are not providing them with 21st-century survival skills," says Page, a finance, economics and business teacher at Reading High School in Reading, Ohio. Technology is a great way for teachers to help students understand complicated financial topics. Instructors can try these three technology-based ways to engage high school students learning about personal finance. 1. Game-based learning: Practical Money Skills, a site that works to help consumers and students learn the essentials of personal finance, offers games and other educational resources. Another site, OnGuardOnline, is a personal favorite of Page's. Sponsored by the federal government, the site offers educational resources and games to teach teens how to keep personal information safe and secure online. 2. Budget simulations: Both education experts agree that learning how to create and maintain a budget is one of the most important skills that students should learn. Page recommends Budget Challenge, a personal finance simulation tool. Students can learn how to manage a checkbook and maintain a budget, among other skills, using the program. "I use it because I'm trying to bridge content understanding with marked behavior change and that's a way for me to do that," Page says. 3. Smartphone apps: One of the best tech tools to teach financial literacy is one most students already have – a smartphone. Page recommends using an app like RedLaser to teach comparison shopping. Users can scan a product's bar code and instantly receive information on prices of the same product at nearby stores and the Web. "You're not going to use it for a piece of gum, but if it's a $200 pair of shoes you might save $50 in three seconds," Page says. Urging students to set reminders on their phone to annually check their credit report using the site Annual Credit Report is another simple way to nudge students to take action, Page says. While some students may not see the value in financial literacy education, experts agree that it is crucial. "Some kids may say, 'Oh I don't want to take that,' or 'I want to take another AP class,' but the fact is that everyone has to deal with money," says Felshaw. "It doesn't matter what career you choose or if you don't go to college. Everyone has to deal with money. It is so basic and it is so essential."
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Today’s teens could learn a lesson from Molly Ringwald.
In the classic 1980s coming-of-age flick Pretty in Pink, Ringwald’s character is hard up for cash. So she makes a custom prom dress from two secondhand gowns. And it’s one of the most iconic movie dresses of all time! These days, things aren’t so simple. From the "must-have" stretch limos to the designer duds, average prom spending hovers around the $1,000 mark. Included in that number is a $300 average "promposal"—an often over-the-top way of asking a date to the prom. It’s kind of like a wedding proposal, but it’s for prom. And guess what? Parents are footing most of the bill, according to a Visa survey. Moms and dads, listen up. This isn’t a wedding. It’s a high school dance, for goodness’ sake! So stay rational despite what everyone else is doing. Instead of letting your teen run wild with your wallet, use this night to teach them a life lesson about how to have fun on a budget. Here are five steps for making it work: 1. Have your teen make a budget. Your child begs for independence all the time, right? Here’s your chance to give it to them. Ask your teen to write down their total prom budget—even if they’re way off base with the estimates. Safe mistakes now will prepare them for a life beyond limo rides and glittery shoes later on. Plus, they’ll learn a lot more by failing or succeeding on their own, rather than if you swoop in and fix all their figures. 2. Determine how much you’re willing to help. If you’re married, sit down with your spouse and figure out how much you want to contribute to your teen’s prom fund. Remember, they aren’t entitled to anything. This is a gift. And if your budget’s tight, make sure your regular household expenses are covered before blessing your child. Don’t dip into your emergency savings or go into debt for a four-hour party. 3. Put the crown in their court. After you agree on how much (or little) you will give your teen, go ahead and hand over the cash. At this point, they’ll have to make some grown-up decisions. If they really want that name-brand tux, they’ll need to use their prom savings (assuming they have some) or figure out how to earn the extra money. Or they may decide to wear a simple suit and splurge on a nicer dinner instead. It’s up to them now. 4. Stick to your budget, even if they don’t. If your teen is burning through their prom cash at an alarming rate, stick to your original plan. That means you need to keep your wallet closed. You can still guide them with some parental wisdom, though. For example, have them focus on three important prom expenses—like dinner, the tickets and the attire. They’ll need to let the other stuff go. This is where the budgeting rubber meets the road, and they’ll realize money has its limits. 5. Stop comparing.It’s easy to look at what other parents are doing and second-guess your strategy. But your goal here is to raise a money-smart adult, not a teen who spends like a king or queen. So be confident and refuse to bad-mouth or judge other parents for spending more or less than you. Instead, focus on the exciting parts of prom your child will enjoy, not what they’ll miss out on. The great thing about teenagers is they can have fun on any budget. So as you’re lining them up to take pictures with all their friends, be proud that you stuck to your money plan and taught them how to do the same. It’s a life lesson that will stay with them much longer than some over-priced updo. To help you with the financial challenges of parenting, In addition to saving, you can learn more about how to teach kids about money, teaching your kids to work hard, spend wisely, and give generously—all with a spirit of contentment that will transform their lives. Giving gifts never gets old. It’s always fun to see a loved one’s eyes light up as they open a special Christmas gift you snagged just for them. You can’t help but smile too. While your enjoyment of the season doesn’t change as you get older, how you spend your money definitely does. You start small, and as you’re able, you pour more of the resources God’s given you into generous giving. That’s why we think Christmas only gets better with age. Now we know Christmas is still a couple months away, but it’s never too early to start saving for Christmas! But first, you have to know what your budget will be. Just for fun, we made a list of Christmas budgets from your teen years to your retirement years. Wherever you are right now, we wish you the sweetest of celebrations for the upcoming Christmas season! Teens: You’re focused on buying clothes and gadgets for your BFFs. You don’t have a care in the world because bills aren’t in the picture yet and your part-time job provides a constant stream of fun money. Christmas is just another excuse to spend a few extra hours at the mall with your pals. 20s: Ah, this is a weird time when it comes to money. You’re working full time trying to pay for the duplex you’re splitting with three other people. Way to be an adult. It’s safe to say you’re not exactly bringing in the big bucks. Your roomies may get a homemade card if they’re lucky—and the heating bill doesn’t go up. 30s: Christmas is all about the kids now: your kids, your sister’s kids, your brother’s kids, your friend’s kids. But you have to draw the line with the amount of gifts you can buy and give! Your young family is still in the planning stages of life and expenses are high (read: kids). But there’s nothing quite like watching wide-eyed little ones tear into wrapping paper. So worth it. 40s: Christmas is still about the kids, but instead of teddy bears and Tonka trucks, your tweens and teens want cell phones and laptops. Good thing your income is keeping up with their maturing taste—unless that taste includes a new car. That’s so not happening. 50s: Family time is your focus now. With the kids away at college most of the year, you love spending time together at Christmas. Gifts become less about stuff and more about sharing experiences, like renting a cozy cabin or heading out on a holiday lights tour. This is the good stuff. And it’s what you’ve been missing as they’ve been off studying (at least you hope they have!). 60+: Let’s be honest: Kids are great, but grandkids are stinking awesome. Who can resist those cuddly fat rolls and first steps? They just melt your heart. Now that you’re retired, or thinking about retirement, you have some extra time and cash again to spoil your grandbabies with toys, trips and treats. And you wouldn’t have it any other way. You’re absolutely smitten. Even in the busyness of the holidays, you are confidently teaching teens about money principles. It’s easier than you think! And trust us—they will thank you later. No matter which season of life you will be in this Christmas, give as generously as your budget allows. And remember to slow down and focus on those sweet smiles and precious memories. They’re the best. Ask any teenager if he wants money, and you’ll get a resounding yes! Ask any teenager if he wants to learn about money, and you may get a blank stare.
For years, business teacher Shelley Wheeler of New Buffalo, Michigan, wrestled with this concept. How could she get her students excited about spending, saving, and investing wisely without boring them out of their minds? “When Dave is talking on the videos, my kids are not messing around,” she says of the attention-grabbing lessons that continue to interest her classes four years later. “Teachers can say the same thing over and over, but when somebody new says the same thing, all of a sudden kids go, ‘Wow, I can’t believe that.’” Impacting a community Shelley was so thrilled about the turnaround in her teens that she shared her success during a monthly meeting of local career and technology educators. Thanks to her glowing review and a generous donation from Fifth Third Bank, the course has now reached more than 2,000 students in high schools across Berrien County And the kids are doing more than just watching videos and writing in workbooks. They’re acting out these financial principles in their own lives. Shelley remembers an autistic student who was bursting at the seams before class one day: “He said, ‘I got paid yesterday, and I need you to see this.’ So he went over and sat down at his computer, and he showed me how he transferred his 500th dollar into his emergency fund. That was one of the coolest days ever.” Testing their wings Other students are using a bit of trial-and-error before applying their money smarts. During her freshman year of college, a former student found herself caught in the cycle of social spending. After burning through most of her summer savings, the undergrad remembered her high school finance class and course-corrected before going into debt. Another young woman wound up in over her head with a car lease after high school. Because of what she learned in Foundations, she realized the car lease was a bad idea. She came back to her former teacher for advice, and after a few hours she left encouraged and confident to make wiser money decisions in the future. Shelley says that’s the beauty of teaching Foundations in high school—kids can gain a solid understanding of financial right from wrong before they leave the nest. But that doesn’t mean they’ll automatically make the right decision every time. “If I can teach them early, they might experiment—which I have seen them doing—but they catch themselves early,” she says. “My students are coming back and saying, ‘Oh my gosh, this was really stupid.’ But it’s long before they’re $50,000 or $60,000 or $70,000 in debt.” Giving like no one else Before discovering Ramsey’s materials, Shelley and her husband of 25 years had been debt-free for about a decade. Now, all their hard work is paying off as the couple builds wealth and enjoys the best part of financial security: giving freely. “Making wise financial choices has given us financial peace and the ability to truly give like no one else,” she says. And if just a fraction of Berrien County’s students learn to live and give like Shelley has, this humble teacher will have accomplished her goal. Because when one student “gets it,” their future spouse, kids and grandkids get it too. To help you with the financial challenges of parenting, In addition to saving, you can learn more about importance of financial education for kids, teaching your kids to work hard, spend wisely, and give generously—all with a spirit of contentment that will transform their lives. Dream with us for a minute. Imagine what our world would look like if we got serious about raising money-smart teens. Our country's student loan debt would disappear, credit card companies would be out of business, and we would have the resources to eliminate poverty and get clean water to millions around the globe.
But even if you can’t solve all the world’s financial problems right now, you can make a difference in your own house. Start today by busting four common money myths your teen might be tempted to believe. Myth #1 – High school students don’t need to worry about money. A recent MSN Money survey found that one in four teens didn’t know the difference between a debit card and a credit card. Add to that the fact that more than a third of high school seniors use credit cards and you bet we’ve got a problem! Set your kids up to win with money by teaching them how to be intentional with their dollars. Help your teenager give every dollar a name by setting short-term goals, like saving for a car or a graduation trip with friends. Myth #2 – Teenagers aren’t old enough to budget. A study by Education Insider found that 80% of college-bound students haven’t estimated the total amount of money they’ll need to graduate college. With numbers like that, it’s no wonder America’s student debt sits at a record $1.2 trillion! Here’s the deal: If you’re old enough to spend money, you’re old enough to budget money. Helping your teen develop smart budgeting habits now for small things like gas money, movie money and shopping money will help them budget for big responsibilities like rent, insurance and retirement later on. Myth #3 – Credit cards teach teens how to handle money. Credit cards teach kids to spend money they don’t have. That sounds like the opposite of responsible, doesn’t it? Even so, a recent study by Sallie Mae found that 84% of incoming college freshmen already have a credit card. College should be the time kids are learning important life skills—not becoming slaves to a credit card company. Even if your teen knows better than to play with credit, they need to be aware that credit card companies are pursuing their generation. A Higher One study revealed that college students receive an average of four phone calls and five mailings encouraging them to apply for credit cards—every month! Teach your teen what it really means to be responsible with money by skipping credit and sticking with cash. Maybe spend a few minutes showing them how much those "emergency" trips to Starbucks or the mall really cost when you add the credit card interest. Myth #4 – Student loans are good debt. A recent study found that the average college student graduates with more than $27,000 in student loan debt. Imagine your child is fresh out of college and ready to take on the world . . . but they can't take the job they want because it doesn’t pay enough to cover their student loan payment. Most entry-level positions don't come close to covering the average student loan bill, much less when you factor in the cost of rent, gas and food. “Good debt” is a contradiction. If anyone tries to tell you otherwise, run the other way! Being a teenager is hard enough without worrying about debt. Monthly payments are draining—on your bank account and your spirit. You can make sure your teens never experience that by teaching them what it really means to be responsible with money. To learn more about how to teach kids about money, just drop your comments in the comment section. How are you teaching your kids about money to be dollar-wise? How will you know if it works? I'm the son of a fruit peddler (Max's Mobile Market), and I grew up impoverished. I didn't know I was poor, though, because my mom managed to make do on dad's meager earnings and provide us with everything we needed. My own income as a pediatrician and professor is heartier than my dad's was, but so are our expenses. So as a family, we are very careful. Our kids grew up respecting the value of money and knowing how many different priorities need to be met in the life of a family. My wife and I made sure they were part of important buying decisions as they were growing up, and we would remind them how many boxes of apples Grandpa Max had to sell to pay for school clothes when I was little.
A phone call a couple years ago told us we must have done something right. Our daughter, then a college senior, called to tell us she was stuck at Stella's—a quaint, Euro-style cafe just off campus where students hang out, study, and Facebook. On a day when she needed to get away from distractions and work on her senior thesis, our little girl took her laptop to Stella's where, for one dollar a day, patrons can get unlimited Internet access and nurse a chai for hours. Accidentally, my otherwise tech-savvy child clicked the "5 days for $5"³ button on Stella's WiFi prompt instead of the "1 day for $1"³ button. She freaked. Well, semi-freaked. "Five dollars is a lot of money! I would never have paid that much on purpose!" she told us from Stella's, where she was now encamped until "17:54:38, 2/11/12," as her digital receipt read. "Go home, sweetie—you don't have t stay there the whole time. Work at home; you have Internet at your house. Make dinner. Take a shower." "That's not the point, Dad. I paid for it; I should use it. Otherwise, it's a complete waste!" Stella's wasn't really going to let her sleep there till Saturday, but if they would have, she might have. Actually, she probably wouldn't have slept for fear of wasting paid Internet minutes. In the big scheme of things, five dollars is a just a drop in the college expenses bucket. Not so much a bucket, really, as a sinkhole. But it's a good thing when your kids worry about all the little drops that fill the bucket. It means they were listening. Listening to us compare prices, debate priorities, and make tough choices as they were growing up. Kids will inevitably resent some of the "no's" we must tell them. The "no" to the must-have toy they saw on TV, the cool clothes all the other kids are wearing, the video game the neighbors got for Christmas. Without our coaching and explaining, the "no's" can seem arbitrary and unfair. But, ideally, making your kids part of the budgeting process from an early age, teaching them about charity and those who are less fortunate, and working with them to make compromises everyone can live with will help your kids become financially responsible by the time they're old enough to get stuck at a place like Stella's. Teaching your kids about money When should you start teaching your kids about money and how do you introduce the different money concepts to them? Learn how Dickie Wong, a finance professional, turns day-to-day activities into learning experiences for his pre-schooler daughter, Aika. The first time when Aika was given pocket money, Mrs Wong wanted her daughter to differentiate between needs and wants and cultivate good money habits. Let's find out how Aika makes her financial decisions. Are Mr and Mrs Wong satisfied with her performance? To teach lessons in financial responsibility, discipline and good money habits, parents should take note of the following:
When it comes to teaching kids about money, don't pass the buck. Cash in on the chance to teach him money lessons.
Many conversations in your family probably involve money matters. They may often be aggravating back-and-forths with pleading, misunderstandings, and even the occasional tears with your kid about why you can't drop everything and run to the store to get a Frozen toy or a set of Legos. By the time kids reach second grade, they aren't just eager consumers, they're also curious about how much toys, games, movies -- even cars -- cost. Yet most 7- and 8-year-olds' idea of fiscal resourcefulness is to ask (or beg!) you for money. It shouldn't be that way, experts say, because constantly doling out dollars encourages them to be impulse spenders and poor money managers. Instead, follow this valuable advice. Start an Allowance The best way to teach the value of money is to give your kid some of his own, so initiate a weekly allowance. Just how much is a personal matter, based on your financial circumstances and the going rate where you live. One approach: "Start with an amount that's equivalent to half your child's age; for example, $3.50 for a 7-year-old, $4 for an 8-year-old," suggests Janet Bodnar, author of Raising Money Smart Kids. Many experts believe that an allowance shouldn't be contingent upon meeting his routine expectations such as unloading the dishwasher. "It's important to teach children that doing chores is an expectation for everyone in the family," says Mary Gresham, Ph.D., a financial psychologist in Atlanta. If you want to give your child the opportunity to earn extra money -- by raking leaves or washing the car -- consider making it a separate transaction." Help Her Learn to Save Don't just hand out cash. Help your child set goals for her money. Does she have her eye on an iPod touch or tickets to a Taylor Swift concert? Get out the calculator and explore various saving scenarios together. Some kids are naturally thrifty and will want to sock away every penny, while others are the spendy type. Both styles have virtues and consequences, so allow her to experience her chosen approach. Giving your child her own money will also encourage independence. In keeping with that spirit, try to take an advisory role. "An allowance should have relatively few strings attached to it," says Lawrence Balter, Ph.D., a child psychologist in New York City. Even if you think she's frittering away her money on scented pencils or ice cream -- flavored lip balm, offer your advice and reasons for thinking that's not a good idea, but then let it go. Buyer's remorse can be a useful lesson. But you should set some limits. If something is against your rules or beliefs, don't accept the "it's my money" retort. Things like ATVs (too dangerous) and a hard-to-care-for pet (too much responsibility) are examples of perfectly acceptable places to draw the line. Similarly, if you don't allow unlimited candy or soda, having an allowance shouldn't give your kid carte blanche to fill up on them. Show Him the Bill Your child is watching how you and your partner handle money-related issues. Whether you make big-ticket impulse purchases or debate, discuss, and comparison shop before you buy anything, the way you deal with your finances affects his attitude about money. "If you want your kids to save and invest, they need to see you do it," says Elisabeth Donati, CEO of Creative Wealth International, a financial-literacy company that provides resources to families. e mindful, however, that many financial transactions these days are abstract. Whether you're swiping a debit card or making online payments, you need to point out how things work so that your child understands the cold-hard-cash connections. For example, when you charge something tell him that you're spending real dollars. Follow up by letting him look at relevant parts of your monthly statement so he can see the charges for movie tickets you bought, for example, or the last big trip to the supermarket. The more familiar he becomes with what's going on behind the scenes, the less vague the entire process will be. Give Her Enough Info No one really wants to be asked, "How much did our house cost?" or "How much do you make?" over dinner by a 7-year-old. Don't feel compelled to name your salary, but try not to shut down the conversation either. "Kids lack a frame of reference, so if your answer is $30,000 or $130,000, neither would be meaningful," says Bodnar. Instead, offer a more general statement of reassurance, such as "We have money to live comfortably and buy the things we need for every day" or "We earn plenty to get by as long as we are careful about our spending." |
AuthorHi! I am Tim Connolly and I am providing help to parents to bring up their children in a healthy environment. I am working in this profession from last 5 years, if you have any query regarding this please contact me. Archives
June 2021
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