Educating Children About Finances Could Have Lessened the Current Financial Crisis
It's extremely important that children are being educated about money, says Sheila Bair, a chairwoman of the FDIC. This advice might seem obvious, but Bair suggests that some simple education concerning the math of money could have lessened our current financial crisis. Think about it: more than half of American families experienced decreased wealth from 2007 to 2009, according to the Federal Reserve. And, of course, the hurt continues today.
Bair, author of a children's book on the subject of saving money, suggests that if more people had basic knowledge of money and knew to beware of financial pitfalls, not as many Americans would be in debt. Either they would have made better choices themselves, or learned how to avoid financial red flags: everything from crooked loan brokers to subprime mortgages are sneaky reasons that Americans have fallen into despair. That's why experts like Bair think it's crucial to teach our children about all the tricks in the book. Even simple money-saving strategies could prepare them for every day life, as well as uncertain financial times.
Math and money go hand in hand. While most kids won't grow into careers that require more than basic math, everyone should grow up knowing about money. That's why it's important, some say, for math education to contain a focus on financial responsibility. One of the most important lessons is to avoid craving instant gratification. Bair thinks the I-want-it-now attitude is a cultural flaw, which is why it's so important we correct it in our kids.
One of the most effective ways to teach our children this important lesson is through story. Bair's children's book features two characters, one who is eager to impulse-buy new stuff all the time, and another who diligently saves. While the lesson that saving is better might seem silly to adults, some grown-ups do struggle with saving and do not want to pass bad habits to their kids. To stay ahead of the game, Bair suggests both parents and their kids take a lesson in saving money for the future.
(Photo courtesy of kenteegardin)