I feel strongly about teaching our children how to become financially literate and financially savvy. Here is another installment from Financial expert Cherryl Hanson Simpson. I would love to hear how you teach your children about money. How do you talk about money at home? What other tips can you share with us? Share your comments in the section below.
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Contributed by Cherryl Hanson Simpson
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Recently, while planning for a trip to a Spanish-speaking country, I realised that I had forgotten all the lessons I had learnt in high school about this foreign language. Although I had passed the subject in external examinations many years ago, I had no recollection of even the basic concepts.
Unfortunately this problem is replicated with many of the subjects that I studied in school from primary up to tertiary levels. Although I may have excelled at them in class, the reality is that I did not practise their principles outside of school, so their content became distant memories.
I know my situation is not an isolated case of ’school-subject Alzheimer’s’. I have often wondered why our education system focuses on teaching children so many obscure topics, while ignoring some practical areas that are crucial to the development of our students. I believe that more attention needs to be paid to imparting important life skills to help them to cope in the real world.
We All Need To Learn About Money
One vital lesson that is absent from the curriculum of Jamaica’s school system is personal finance education. Whether we aspire to become doctors, lawyers, nurses or policemen, we all need to learn the key principles of how to manage, multiply and maintain our money Air Max Lunar 90 Flyknit Sale. No student should leave school without attaining an age-appropriate understanding about money.
Looking back, all my financial lessons were learnt through making mistakes and trying to figure out how to get out of the money problems I had created for myself. If only someone had taught me the basic rules of money while I was in school, I would have saved myself a lot financial stress over the years.
Today, one of my goals is to promote the inclusion of personal finance training in the curriculum of primary to tertiary level schools. In conceptualising the ideal money course, I thought about all the topics that I wished that I had learnt in school, and created a framework that could be adapted to different age groups.
This week, we will look at the first four money principles that I think our children should be learning in school:
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One of the major problems that people face with their finances is that they don’t know how to allocate the money they have to pay all their bills Mens New Balance 1574. The concept of budgeting is one that primary school children should learn, as even at that age, they have to make choices with their money.
Using practical applications, students should be taught how to work out all their monthly expenses, fill out a personal budget, calculate the difference between income and expenses and make adjustments in the budget to balance their spending needs with their income.
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Our consumption-focused culture is partly responsible for many of the financial challenges that the country as a whole is facing today. Many Jamaicans equate having money with the ability to spend it frivolously. To address this problem, we have to teach proper spending decisions to young children when they are still impressionable.
Some of the practical areas that would be covered include making grocery lists, comparison shopping for best prices, finding sales via newspaper advertisements, calculating unit prices on goods, differentiating between wants and needs, and learning how to save money by conserving.
The flip side of our high propensity to spend is our inadequate attention to saving air max 90 leather. If our thoughts are focused on spending money instead of accumulating it, is it any wonder that many of us live from pay cheque to pay cheque, and never amass any real wealth? Children need to be taught how to save, as many of their parents are not carrying out this vital activity.
This subject should teach students simple strategies to make regular saving easier, such as putting aside ten per cent of their income. Practical experience would be obtained by them actually opening their own bank or credit union accounts. They should also be taught the factors that make money grow, such as compound interest and the impact of time on savings.
Many people’s first response to having a budgetary shortfall is to try to borrow money to make up the difference. Along with our love of spending comes our dependence on debt. Unfortunately, this negative attitude is being passed onto our children, so it is important to equip them with the tools to understand how to manage debt.
Key principles about debt that should be taught include understanding how loans work, reading loan documents, assessing the capacity to borrow based on a budget, using credit cards, recognising beneficial debt as against harmful debt, and the responsibility to repay debts on time.
Copyright Cherryl Hanson Simpson
Cherryl is a money coach and the founder of Financially S.M.A.R.T. Services, Jamaica’s number one source for practical answers to all money questions. Cherryl is currently writing The 3 M’s of Money. See more of her work at www.financiallyfreenetwork.comand www.financiallysmartadvice.com