A Financially Literate Society – The Five Critical Missing Pieces

If it’s one thing most of us adults are painfully aware of, it’s that we weren’t taught how to manage or invest our money when we were young so that we could live independent, financially free lives as adults. We went to school ‘assuming’ we were learning what we needed to be successful, self-reliant adults. What a charade that was for us and continues to be for our youth.

Most of us wish we’d learned a headful of useful life skills rather than made to memorize and learn worthless information we’ve never used since high school (or dare I say college!).

To make matters worse, parents give lip service to needing to teach their kids about money but rarely do they. They might nag them to save and even to give but they don’t teach them how to grow up and make their own money OR invest the money they do earn or make so it will grow and produce regular cash flow. This is because our society, and hence our schools, are still so focused on:

• Getting kids into college. (Despite the facts that more high school students don’t go to college than do and a larger share of millionaires either never went to college or dropped out.)
• Indoctrinating students into the ‘gotta get a job’ mentality. They don’t expose students to the many ways they can ‘make’ their own money rather than being a slave forever ‘earning’ money by working for others. It seems that politicians are continually talking about creating more jobs but who do they think will create those jobs? It certainly isn’t the employee.
• Getting money from the state. Tests, tests, tests. Who believes the mis-guided, ridiculous notion that teaching kids all myriad of information they will rarely use again and don’t find relevant at all…and then testing them on this it is of benefit? (Ask any kid why he or she is learning what they are learning and they’ll roll their eyes. THEY know it’s a game.)

Yes, there are financial education courses being implemented all over the United States but most of them are boring and are taught in non-effective learning environments by people who have little knowledge or experience investing money themselves. And the online classes are just as boring and ineffective.

Financial Literacy: The Five Missing Pieces

FIVE MISSING PIECES

So what will it honestly take to create a society full of adults who know how to make money themselves and know what to do with it in order to produce regular streams of money to live on when and if they don’t want to work anymore?

It will take the following five pieces to make up what’s missing from most financial education programs, both private and public: The Right School District, The Right Parents, The Right Instructors, The Right Curriculum, and The Right Students.

Let’s take a deeper look at each missing piece to see how you can implement financial education programs for your kids and students that actually stick. And effective means that your students remember the information AND apply it to their lives.

MISSING PIECE #1: The Right School District

Let’s face it, there are a lot of school districts in the United States that talk about getting financial literacy into their schools but most make a huge mistake in the implementation. Here’s what usually happens…

The school board, principals and district presidents tell the parents and community that they have decided to make financial education a priority and are going to start using money curriculums in their children’s classrooms. Sounds great, right?

Yeah, they’re on the right track but here’s the problem…the powers that be sit around and try to answer this question, “What grade should we teach financial education in?” They then decide on a particular time of year and type of class. The problem is not the question but the answer. The right answer is EVERY GRADE. The reason experts have written extensive pieces entitled, “Financial Literacy Doesn’t Work!” is because it’s impossible to instill a critical life skill like money making, managing and multiplying into one semester or one grade!

Think of it this way…math, English, reading, writing and geography wouldn’t ‘work’ either it it were only taught for 11 weeks during the child’s life. There is a reason kids take math and English and everything else for years…so they’ll learn it and remember it for a long, long time and be able to actually apply it to their lives.

You can’t teach kids about saving and investing in 11 weeks, no matter the age, and expect them to really get it.

THE SOLUTION:

School districts must require that their students are provided with fun, experiential money classes starting in the 4th or 5th grade. Ten years old seems to be when kids start understanding the concept of interest and how money can grow, as well as other financial education principles critical to financial freedom.

The school’s curriculum must build upon the foundation each year, and finally, when the child is ready to graduate from high school (or before for those who don’t make it all the way), include how to ‘Move Out’ successfully…how to rent apartments, buy cars and insurance, deal with taxes, start businesses, make wise credit and debt decisions and especially how to invest in assets that product cash flow.

This way when they graduate from high school, they’ll know exactly what to do with their money!

MISSING PIECE #2: The Right Parents

There are parents who seem to be paying attention to what their children are doing and parents who don’t seem to have a clue. There’s not a lot we can do to influence the second group, but parents who care about their children’s futures know they must do two things:

1. Demand that financial education be taught in their children’s schools in a way that is relevant and effective (see The Money Game)
2. Do everything they can to make sure they are instilling the best financial habits and principles they can at home (see The Ultimate Allowance).

The challenge is that so many parents plead “too busy” or “too ignorant” but neither of those excuses gets parents off the hook. They’re YOUR kids…teach them about money even if you don’t know how yourself! There IS no excuse for not teaching your children about money.

THE SOLUTION:

Look deeply at what you’re teaching your kids about money. For a great article on how to do this, download ThreeKeysReport. In this article you’ll learn the three things you must do to make sure your kids are prepared to handle money as adults, but here’s a hint:

1. Talk to them about money every chance you get.
2. Involve them in the family finances (budgets, investment meetings, bank visits, paying bills, etc.).
3. Give them plenty of practice with their own money. The Ultimate Allowance teaches you how.

MISSING PIECE #3: The Right Instructors

Fact: Financial education is a specialty course. That means it requires specific training in order to teach it. And, because the topic of ‘money’ often comes with all sorts of preconceived thoughts, beliefs and attitudes, it’s not a matter of simply handing a financial curriculum to any teacher and assuming they’ll be able to effectively teach their students about money. It would be nice if it were that simple…the reality is that it’s not.

In order for financial education to work, we must have financial literacy instructors who:

• Have personal experience saving and investing money so they can sound intelligent talking about the subject and answer the students’ questions. They don’t need to be experts but they sure need to understand the topic.
• Have a passion for teaching money to kids and teens. Students learn better when their instructor is excited and passionate about what they are teaching.
• Understand and have training in accelerated learning: teaching techniques that teach to all learning styles and make learning fun, relevant and effective for all.
• An ability to address money beliefs and attitudes in a non-judmental way.

With so much of our education system going digital, there is often talk about putting financial education into computer games and having kids learn online but it doesn’t work nearly as well as a tangible, interactive, experiential, life-simulated game.

Money, and therefore the learning of it, is best experienced for real. In other words, financial education works best when it’s in the form of a money game, where the kids get actual paychecks for time and energy they expend, learn to manage their money, learn to ‘pay themselves first’, save and then invest. Throw in lessons on credit, assets, liabilities, debt (good and bad), spending, budgets and more and now you’re talking about developing some pretty financially astute young adults.

THE SOLUTION:

Look for instructors at your child’s school who have a passion for financial education. Start with the math and economics teachers and go from there. You never know who has gotten it under their skin and might be ready to take it on. And then, if you have to, buy The Money Game for that instructor to get them going. It might be the best investment you ever make in your child’s education.

MISSING PIECE #4: The Right Financial Education Curriculum

Talk to just about any teacher who has attempted to teach financial education and they will affirm that most financial literacy programs are boring as all get out. Yuk…it’s no wonder our kids rarely learn it the first time…they are bored out of their minds.

Financial literacy requires an active, entertaining, multi-sensorial financial literacy curriculum, preferably in the form of a game that is fun, relevant and simulates the actual making, managing and multiplying of money.

THE SOLUTION:

When you or your child’s teacher go looking for a curriculum, expect to get what you pay for. The free programs are mostly created by big corporations who haven’t a clue how to teach financial education the right way and the topics and lessons they decide to teach reflect their priorities (banking, mutual funds, credit cards).

Do your research. Choose a program that is activity oriented and that includes an overview of entrepreneurship and investing in assets.

Note about community speakers: Don’t assume they 1) know how to present to kids or 2) that you know what they are going to say. Ask to see them in action first and get an outline of what they want to talk about.

MISSING PIECE #5: The Right Students

For any education to work, you must have students who are engaged, excited about learning and feel that the information is both relevant and worthwhile to learn.

The saying “You can lead a horse to water…” comes to mind when it comes to financial education. Just because you set out to teach your kids or your students how to make, manage and multiply their money doesn’t mean they will necessarily listen, participate or learn the information in a way that inspires them to use the information in their own lives.

THE SOLUTION:

You have to remember that it’s YOUR responsibility to make the information relevant to their lives. Students who are prepared to learn and kept engaged throughout the process are the ones who actually learn! Enroll them in the topic with plenty of questions and discussions, games, activities, fun, personal stories and a whole lot more. If you aren’t familiar or trained in accelerated learning, take a course, buy a few books, make a phone call (to me!).

If your students are bored, it’s because your teaching is boring!

In summary, what makes financial education programs either work or not are the presence or absence of the following missing pieces:

#1: The right school district.

#2: The right parents.

#3: The right instructors.

#4: The right financial education curriculum.

#5 : The right students.

If your financial education programs are missing one of these pieces, go looking for the missing ones and don’t stop until you find them! If you don’t have a program yet, I support you in making it happen now!