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It’s important to teach young people how to manage money

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By Richard Eckstrom

 

 In recent years there’s been a lot of discussion about what schools should and shouldn’t be teaching. But there seems to be agreement that schools often overlook one very important area in preparing students to successfully manage life’s responsibilities: financial literacy.

To be sure, the recent staggering number of people who found themselves way over their heads in easy credit card debt or who lost their homes through foreclosure was a byproduct of our tough economic times.

But there’s also reason to believe it’s partly because basic knowledge of finances – checking accounts, mortgages, taxes, credit cards and smart shopping – is lacking.

As the chief financial officer for state government, I’ve long believed that more should be done to teach Americans, particularly young people, the principles of sound money management.

So it’s encouraging to witness a growing movement to teach young people about finances.

Several years ago, I was delighted to learn that the Credit Union National Association (CUNA) had developed “Thrive by Five,” a program to teach young children about money. 

Recognizing that efforts to teach financial literacy to high school and middle school students often fail, CUNA’s efforts wisely include a program for preschoolers. Because older students already have been saturated with advertising messages and with peer pressure for the newest and best of everything – no matter the cost – the obstacles for beginning a financial literacy program after bad habits have been established are impractical to overcome.

As CUNA points out, “Children learn about money from many sources. Long before they enter school, they observe adults using money and buying things. They watch television daily and see thousands of commercials each year. Like it or not, money is a part of your preschooler’s life.”

CUNA’s “Thrive by Five” Web site, www.creditunion.coop/thriveby5, is a great place for parents to pick up ideas and resources for teaching preschoolers about money. It even provides parents with clever and action-packed lesson plans to use at home for:

• Teaching about how money works and what it can do

• Talking about how families use money, and

• Developing good money management practices.

I’m familiar with the program, and I can tell you it’s an excellent one. 

 Come to think of it, if ”Thrive by Five” is successful for toddlers, why not develop a similar program for government officials?  

Richard Eckstrom is comptroller general of South Carolina.