How School Systems Are Failing Students in Financial Literacy

How School Systems Are Failing Students in Financial Literacy

The one thing every parent should do to supplement their children’s education

If you talk to parents of grade schoolers these days, they’re likely to complain about how it’s suddenly impossible to help their children with their math homework. Why? Because of a new system for teaching math, called Common Core—a complete departure for those of us who learned arithmetic prior to 2010. Sure, we arrive at the same answer, but how we get there is completely different. And because students must show their work, our “old” math skills won’t help them learn these “new” concepts.

Perhaps, though, this new methodology will help increase our country’s dismal math scores. According to a new assessment of financial literacy from the Organisation for Economic Co-Operation and Development (OECD), one in five American teens fail to meet the level to be considered financially literate. By comparison, only about one in 10 Chinese and Russian students fail to meet that benchmark. The 22% of American students who failed to meet the baseline of financial literacy can "at best" identify financial products and terms and make simple decisions on everyday spending, the OECD said.

Then, there’s the biennial Survey of the States by the Council for Economic Education, released exclusively to in 2016, that shows only 20 states currently mandate that high school students take economics. Likewise, only 17 states require high school students to take a course in personal finance. These numbers are either unchanged or have decreased as compared to the 2014 results, signaling that there’s no increased importance being placed on financial literacy in our country’s school systems.

Is it any wonder that the average U.S. household owes $16,061 in credit card debt, up from $14,546 in 2006? The same study reports that total debt—including mortgages, student loans and auto loans—was expected to surpass the amounts owed at the start of the Great Recession by the end of 2016. This is further proof that financial ignorance comes with a hefty price tag—a burden our future generations are unwittingly going to face when they reach adulthood.

Teach Your Children Well

Those statistics on financial literacy are hugely alarming, considering money is a basic life skill in our society. These figures highlight just how badly our school systems are failing our children. Money and finance are all about numbers. There’s simply no way to become financially fit and reach your financial dreams if you aren’t comfortable working with numbers. And I’m not talking about advanced calculus here—nearly every financial decision you need to make in life comes down to basic addition, subtraction, multiplication and division.

Even more disturbing is the realization that even if a child happens to be a mathematical genius and moves into advanced classes, their academic success doesn’t necessarily translate into financial literacy—once that child turns into a young adult, and is out of school and working professionally, he or she can easily be headed down a slippery slope of mismanaging money. Why? Because their education failed to teach them fundamental lessons about money and didn’t provide any real-world applications so they could practice.

The truth is, your child’s financial education is only going to come from one of two places: either learning from their own mistakes (which can range from costly to devastating, depending on the lesson) or learning from you. Isn’t it in your best interest to take a proactive approach to helping your kids navigate the financial waters, so you set them up for a successful future (and don’t become a financial burden on you later in life)? Since our school systems aren’t giving your kids the financial education they need, it’s up to you to take on this responsibility. And the earlier you start, the better.

Now, this may seem like a daunting task to many parents, especially those who don’t consider themselves savvy in their own financial matters. But that’s exactly why you must start now—otherwise, your children will end up in the same uncomfortable position someday. You have the power to stop this cycle of financial illiteracy, you just need the right resources to complete your education so you can pass it along to the next generation.

The Family That Plays Together…

The best way to truly teach your children financial literacy is by helping them understand the concept of cash flow—money coming in, money going out, and the remaining money at the end of a specific time period (usually a month, quarter or year). Teaching children the relationship between earning, spending and saving will help them understand the value of money.

Because playing games is an incredibly effective way for children (and adults) to learn, consider investing in a tool such as CASHFLOW® For Kids (recommended for ages 7-14) or CASHFLOW board game to accompany your education and teachings. These financial resource board games start you in a typical 9-to-5 job (yawn) and take you on a journey to build up an arsenal of assets that will propel you into the fast track where real wealth is built (the fun part).

The CASHFLOW games not only teach you how to invest and acquire assets such as property, stocks, businesses and precious metals, it also teaches you how you behave within various investing scenarios. It’s a safe environment in which you can test out strategies for building wealth you might be reluctant to try in real life. These interactive resources are a great way for the entire family to practice building a more secure future in a fail-safe and lesson-rich zone.

They say that families who play together, stay together. But I firmly believe that families who play together can retire early together.

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