Financial Education Is Priceless

By: Katie Stukey Email
By: Katie Stukey Email
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It's Money Smart Week in Nebraska, a time to review money management and consider making changes. Financial education is changing to meet the needs of today's student.

The textbook for financial literacy is relatively unchanged with chapters on budgeting, checking and savings, taxes and investments. The difference, teachers say, is breaking the bad habits society has formed among children.

“I think we did a better job kind of choosing between what we needed and what we wanted and maybe delaying some of those purchases where now, I think, we're sometimes too quick to purchase,” said Bellevue West High School business teacher Jeanette Carlson.

In Carlson's class, it's all about starting good habits. If a student saves 10 percent of their babysitting money, it will be easier to save 10 percent once they're making a much larger salary down the line. The majority of teenagers say they've already talked to their parents about paying for college, but how about their financial independence after college?

The "Teach Children to Save" program returns to 16 eastern Nebraska schools starting Thursday, an annual event to fill fourth-graders in on smart spending habits. Parents may want to increase their savings level after hearing this latest data. A national survey indicates that in 2011, 75 percent of teens said they expected to be financially independent by the age of 24. By 2013, less than 60 percent thought they'd achieve financial independence by 24.

Nearly a third of all teens now say they expect to depend on their parents until they're at least 25, some say it will be closer to 30. “Since 2008 with all the change and unrest, maybe they're seeing that wow, it's gonna be a little longer,” said Carlson. “I thought I could be on my own a little earlier, but now it's not gonna be."

Carlson says the recent push for more financial education has likely helped students become more realistic when it comes to finances and what it really takes to make it on your own. Still, the majority of her students expect to be better off financially than their parents.

One Bellevue West student says she managed to blow several months of paychecks from her first job without even realizing it. She signed up for a personal finance class as an elective and her money management is improving.

“Before this class I didn't budget at all,” said junior Stephanie Purcell. “When my taxes did come back I saw how much I made and I thought oh, I didn't save any of that and I spent most of it on stuff I didn't really need and so now I'm starting to budget. I'm starting to save for a trip this summer."

Stephanie said she wasn't even thinking about how much she was making until she got her W2 form back. In less than five months she'd made $1,100, but between all her fast-food trips and buying clothes she hadn't saved a penny.

Educators say kids should get their hands on money early, even if it's simply handing them the cash to pay when checking out at the store and then help them do the math with the change.

An allowance is a simple way to learn budgeting for when they're actually making money. Try using three jars. If your child's allowance is as small as a few quarters, put one in savings, one to give away to their favorite cause and one with which they're free to spend. Getting these habits started early should prepare the next generation for something our society hasn't known well in a long time, financial stability.

"My mom always gets on me about how I should save money and how much my life in the future depends on money and how I need to know how to deal with it,” said sophomore Jacob Spahn.

"It's something you need for the rest of your life, you need to know how to spend your money, otherwise you're gonna end up blowing it on things like Taco Bell or things you don't necessarily need all the time,” said Purcell.

To budget with older kids, let them in on the bills process. Open the energy, electric and health care bills with them to give them a concrete idea of how those dollars add up each month. And as you feel comfortable, start passing expenses off to them with things like gas, insurance or phone so they can start to differentiate between needs and wants.

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