Friday, March 13, 2009

Teach Our Kids About Money Management

Teach Our Kids About Money ManagementOur education system has enabled our kids to be proficient in topics like maths and science but when it comes to financial education, I will say they are clueless and even illiterate.

It is not their fault as our education has neglected the importance of budgeting skills and the practical concepts behind assets, liabilities and cash flow. The idea is simple: you must have more assets than liabilities to increase your wealth.

These are the bread and butter issues facing a corporation but equally applicable and essential to managing our personal finance. As they say, "What is left is not right, and what is right has none left." This is what happens when a company's balance sheet or our personal finance go awry.

Is it a deliberate attempt by our education ministry to deprive our kids of finance curriculum in schools or just a blind spot? Does our government actually prefer us to cede control of our finances to the greedy financial institutions?

Regardless of the reasons, I feel a lot of problems facing our kids and heavy indebted nation stem from finance illiteracy and irresponsible spending habits. Hell, I think our House Representatives, senators, or regulators don't know much about basic finance either, not to mention complex financial jargon. Just look at their inadequacy when questioning the fat cats on Wall Street.

Maybe the government should take a leaf from Sand Creek High School which is teaching its seniors the street smarts of managing money.

I am also glad that financial literacy competitions like MoneySKILL Mania (hosted at the University at Buffalo with M&T Bank), are open to high school kids.

Globalization has made the world more competitive (jobs are not easy to come by) and the least we parents can do, is to impart money management skills to our kids, not to leave them an inheritance, which most likely will be squandered away.

I always believe that people who make a lot of money but never learn how to handle it simply end up in more debt than the people who have less money.

What do your guys think about our education system? Has it prepared our kids to handle their personal finances? Please share your thoughts here.