From Classroom to Bank Account: The Urgent Need for Financial Literacy in K-12
Disclaimer: Good Day, Readers. WealthBuildingPowers blog is a financial literacy/competency blog and does not provide specific investment recommendations.
Preparing Our Youth for Financial Independence: The Role of K-12 Education
Between high school and college, I sat through hundreds of hours of courses (SEVERAL BORING), but very little was taught to help me manage my finances and build a wealth-building strategy. Like many, I increased my financial literacy by reading, taking community college and online courses, studying people like Warren Buffett and Charlie Munger, and trial and error. I also increased my formal education in business.
AS OBAMA LOVES TO SAY – “LET ME BE CLEAR” – FINANCIAL LITERACY EQUIPS OUR YOUTH FOR FINANXCIAL SUCCESS!
Financial Literacy is understanding and knowledge of financial concepts and principles, such as budgeting, saving, investing, the magic of compound interest, asset allocation, and managing money, including debt, allows YOU to make informed and better decisions about YOUR money. These and more competencies help you achieve YOUR financial ambitions.
The good news, these concepts are simple. The bad news, most of your peers score an “F” grade when they take a Financial Literacy survey test.
I did not begin to master these concepts until my 30’s. This delay cost me! I suggest you start with your kids as soon as they can grasp these simple concepts. Understanding financial concepts can help individuals build wealth over time and secure their financial future.
“COME ON MAN” – LET’S GO BEYOND MATH AND ENGLISH: RETHINKING EDUCATION WITH FINANCIAL LITERACY PRINCIPLES!
Basic Financial Concepts:
- Understanding the concept of money, its value, and different forms of currency.
- Knowledge of banking services such as savings accounts, checking accounts, and certificates of deposit.
- Understanding interest rates, loans, and credit.
Budgeting and Money Management:
- Creating and managing a budget.
- Differentiating between needs and wants.
- Tracking expenses and income.
Saving and Investing:
- Importance of saving money and setting financial goals.
- Introduction to different investment options (e.g., stocks, bonds, mutual funds).
- Company savings tools such as 401K
- Retirement savings tools: Individual Retirement Account (IRA), ROTH IRA, etc
- Understanding how to determine your risk tolerance and the impact on your desired
Credit and Debt Management:
- Understanding credit scores and reports.
- Responsible use of credit cards.
- Managing debt and avoiding debt traps.
Financial Decision Making:
- Evaluating financial choices and making informed decisions.
- Understanding the consequences of financial decisions.
- Recognizing scams and predatory financial practices.
Income and Careers:
- Exploring different career paths and income sources. Everyone does not need a four-year or more degree! Trades can pay very well.
- Understanding when to utilize school loans and how much. Simple rule: Do not borrow more than your first year’s expected compensation. If that is $30,000.00, that’s your maximum., If you major in petroleum engineering, you can expect to start close to $100,000.00 annual compensation, your maximum total loan. Borrowing $150,000.00 to get a “Is Water Wet” degree is a bad idea.
- Understanding the numerous taxes and deductions taken from paychecks.
Financial Planning:
- Setting short-term and long-term financial goals.
- Planning for significant life events such as buying a home, paying for education, or retirement.
Risk Management and Insurance:
- Understanding the purpose and types of insurance (e.g., health insurance, auto insurance, renter’s insurance, short and long-term disability insurance).
- Assessing insurance needs and coverage options.
Entrepreneurship and Innovation:
- Introduction to entrepreneurship and business principles.
- Understanding the process of starting and managing a business.
Digital Financial Literacy:
- Safely managing finances online.
- Recognizing online financial scams and fraud.
- Using digital tools for budgeting and financial planning.
Next week, I will discuss how we can add this critical competency to school curriculums and what you, as parents, can do to make this a reality!
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YOUR GREATNESS IS NOT WHAT YOU HAVE; IT’S WHAT YOU GIVE! – SOME CHARITIES I SUPPORT
St Jude Hospital: The mission of St. Jude Children’s Research Hospital is to advance cures and means of prevention for pediatric catastrophic diseases through research and treatment. Consistent with the vision of our founder Danny Thomas, no child is denied treatment based on race, religion, or a family’s ability to pay.https://www.stjude.org/
Wounded Warrior Project: An American charity and veterans service organization that offers a variety of programs, services and events for wounded veterans of the military https://www.woundedwarriorproject.org
Folds of Honor: Providing life-changing scholarships to the spouses and children of America’s fallen or disabled military. And now, our mission expands to the families of America’s first responders. On our watch, those who protect our freedoms and our families will know they are not forgotten. https://foldsofhonor.org
Wilson’s No-Kill Animal Shelter: A N0-Kill shelter that is a top-rated non-profit. They compassionately care for all their animals. https://wcnkas.org
Tunnel To Towers: Since 9/11, we have been helping America’s heroes by providing mortgage-free homes to Gold Star and fallen first responder families with young children and by building specially adapted smart homes for catastrophically injured veterans and first responders. We are also committed to eradicating veteran homelessness and helping America to Never Forget September 11, 2001. https://dogood.t2t.org/give/320847/#!/donation/checkout
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ABOUT ME
I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger with an NC. State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.
I left a corporate career because I desired to make a difference as a speaker and writer. I was blessed to be coached and mentored by strong women and men in my family and professional life. It is my time to serve and give back.
DISCLAIMER
I started my first business at ~13 years of age (a small but brilliantly created plant nursery). I am a successful investor in stocks, options, and real estate and am happy to share my finance and investment lessons. I am NOT a licensed financial advisor. Please do not construe my suggestions on this blog as recommendations for your situation. As an investor, you must establish your risk/loss tolerance. Investment in any asset involves risk, including complete loss.
Please seek your licensed CPA or fiduciary financial advisors for individual financial advice.
I write this weekly blog to make an impact by reaching an audience and demonstrating the need for financial literacy. I will help you get there.
