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Oklahoma Schools Required To Teach Students Personal Finance
Hugh Pickens DOT Com writes "Paula Burkes reports that under legislation passed in 2007, Oklahoma students, effective this May, now must demonstrate an understanding in banking, taxes, investing, loans, insurance, identity theft and eight other areas to graduate. The intent of personal financial literacy education is to inform students how individual choices directly influence occupational goals and future earnings potential. Basic economic concepts of scarcity, choice, opportunity cost, and cost/benefit analysis are interwoven throughout the standards and objectives. 'Oklahoma has some of the strongest standards in the country,' says Amy Lee, executive director of the Oklahoma Council on Economic Education, which lobbied for and helped develop the curriculum. 'Where other states require four or five standards regarding earnings, savings and investing, Oklahoma has 14 standards including three that are state-specific: bankruptcy, the financial impact of gambling and charitable giving.' The law is designed to allow different districts to implement the curriculum in different ways, by offering instruction in various grade levels, or by teaching all the curriculum in a single class or spreading it across several courses. 'The intent of this law was always to graduate students out of high school with a strong foundation in personal financial literacy to reduce the many social ills that come from mismanaging personal finance,' says Jim Murphree. 'I cannot think of anything that we teach that is more relevant.'"
Maybe students will fully understand the ramifications of going deep in to debt to with student loans.
I can get behind this type of teaching. As the summary states, there is nothing more relevant to someone graduating from high school with no real experience or specific working knowledge that is not self-taught.
It's actually unfortunate that they left it up to the districts as that means there will inevitably be multiple districts where it is planned, or taught, by someone who has no clue about it themselves.
Thusly, I wonder how politically neutral this implementation is...
personal finances courses tend to be:
how to make a budget
how to balance a checkbook (even though nobody uses them)
how credit card interest works
how car loan interest works
how leasing works
how home mortgages work
how bank interest works (or in today's banks doesn't)
some very introductory stuff on investments (ie what are bonds, gics, stocks, dividends, mutual funds, etc).
And I would hope in today's versions they talk a bit about things like payday loans.
Its pretty practical stuff largely divorced from any economic theory.
We used to have civics classes back when I was in school. We learned about the Federal, State, County and City governments, their structure, how you can interact with government, etc. Too many people are so clueless about how it all works they shouldn't even be allowed to vote (although most of them probably don't).
You know, I count myself firmly as a dyed-in-the-wool liberal, but one of the strong suits of conservatism as a philosophy is a belief both in the value of self-reliance and self-responsibility, especially in a financial realm. I have no surprise seeing this come from a red state, and I wish more states would embrace such a curriculum.
It's irresponsible that we don't teach kids how to manage money, and it's a good place to get in their heads that math is useful for something, even if they don't like it. We need a society that values saving and long-term rewards over short-term consumption.
We spend too much time thinking of the other side as "the enemy" because of "wrong" beliefs that don't match our own and not enough time looking seriously at their strengths and how we can embrace those as common values -- places where we need to step up our own game in a bipartisan fashion.
So, good for you, Okies. May this be an example for the rest of us.
If it's for-profit but free, you're not the customer -- you're the product (e.g., the Slashdot Beta's "audience").
Rules to teach your kids:
1. NEVER own a credit card. They serve no purpose and the fact of the matter is, if you use one responsibly (only in emergencies) the credit card company will cancel your card for lack of use after a few months anyway. Trust me, I tried for years to keep one but even with an 800+ credit score they'd cancel it every time.
This is terrible advice. Using a credit card responsibly doesn't mean "only for emergencies," it means "only for expenditures you would have otherwise, and COULD HAVE OTHERWISE, paid for with cash." Pay your bill on time, you pay zero interest, and get cash back.
It's called an allowance and it's considered by many financial experts to be among the best ways to teach money management to children.
It's an excellent tool to teach savings, splitting income, spending, instant vs. delayed gratification, etc. in a really safe environment (because "bankruptcy" Is a harsh, but temporary lesson. Sadly, you learned the hard way what it was like to not grow up with those skills.
That's the point of an allowance. An allowance is a life-training tool to manage money. The kid learns that he COULD spend the hard earned savings on an ice cream, or he COULD leave it save up for that toy he really wants.
The point is to learn these lessons in a relatively safe environment (if they blow their wad on ice cream, they don't have to worry about food, shelter, etc). And to learn the value of splitting your "income" in various bundles - a dollar to long term savings (to get the toy you want), a dollar to spend, a dollar to save for times you need more than you have or emergencies, a dollar for charity, etc. And if one forgoes spending, that can make the long term savings for the thing you really want go so much faster.
And instant gratification versus delayed gratification is an important lesson. Ice cream now vs. now having to wait another month for the toy.
Finally, one thing children learn way too quickly is how to be a tightwad. Sure it helps to save money, but to pinch every penny may not be the best way (price does not equal value) - spending more might be a better option. Anyone's whose dealt with a parent who insists on keeping their 10 year old junker PC going instead of buying a new one knows this. Plus, instill in them the need to actually go out and socialize with friends - sometimes the goal of saving gets in the way of life and it can lead to health and mental issues - there's absolutely nothing wrong with having fun with friends and getting together, but absolutely wrong (especially for mental health) if you're avoiding friends just to save up for something. It's why you have a "spend/fun" jar.
I know that was one of my mistakes - putting every penny in a savings jar without putting anything in towards having fun now (you want to die alone as a rich, but miserable person?).