COMMENTARY | Should we support Education Secretary Arne Duncan’s movement to begin teaching kids financial skills? Absolutely yes! This isn’t something we can leave up to parents, and we shouldn’t assume that states or local education programs will handle it. Our country is still in crisis and the longer it takes to recover, the older our children get. We need to invest in their financial education now so they are smarter than us and can make better decisions when their time comes.
I’m of an age where both of my parents had pensions. They didn’t have access to a 401(k), and didn’t know what an IRA was. Their retirement plans were based on a combination of pension and social security. Since they were not aware of the financial knowledge I would need, they couldn’t teach me about it. As a middle class family we didn’t have a lot of investments or savings. However, my parents did try to teach me about saving money, and I got my first savings account when I was about 6 years old. Having that account with my “passbook” that listed all my deposits (in handwriting by the teller), gave me a sense of ownership at a very young age. Unfortunately, that’s where the education ended.
Duncan has the right idea, but how long will it take to put something into action? Both Australia and New Zealand are making great strides to educate kids at a young age. At this point, the United States seems to be lagging behind. New Zealand has aligned education programs with online information and games that are organized by the different stages of life, starting with kids. See the New Zealand government website at Welcome to Sorted – Kids & Money. This area of the site was created with kids in mind. Everything about it is designed for a rich and engaging experience to keep kids interested. Now, compare the United States federal government site MyMoney.gov and notice the life events that are shown. It’s not targeted for kids, but it should be.
As Duncan says, “This is not a place where we just need to get a little better. We’ve got to get a lot better, and we’ve got to get better faster.”
My best guess is the federal government will do something but it will likely take some time. Parents take note, and begin to prepare your kids now. After all, they’ll be running the country when you retire.