Financial First Beginnings

MoneyFinancial literacy is one of the most useful and necessary skills over the course of a lifetime. However, until recently, schools have not been teaching money-management skills. With student debt amounting to more than $1 trillion across the country and current issues like low wages and inflation facing young people, it feels like financial literacy should finally get its due.

For many, money management skills come not from a subject taken in school, but are passed on as a quasi-coming-of-age typically taught at home.

A child’s induction into the world of personal finance will typically come in the form of an allowance. Be it for mowing the lawn, setting the table, washing the dishes, doing laundry or any other household chores, children often are encouraged to work in order to earn their first pocket money.

Proper savings will be taught by family members following a landmark such as a birthday, confirmation or bar/bat mitzvah. Parents will teach their kids the value of saving by having them put gift money toward a college fund or into a savings account, rather than allowing a child to have free access to a large amount of spending money.

In all likelihood, the first time that a teenager will see a tax form or exemption will come when they have to fill one out— learning how to do taxes is a skill that tends to be passed on by immediate family. Passing down this technical know-how within the boundaries of a home rather than in the school system automatically gives some kids an inherent advantage and could become a significant factor in the growing class gap.

However, according to Brian Schiffer, the director of social sciences, fine arts and world languages in Baltimore County Public Schools, the state is moving toward a more comprehensive curriculum known as a C3 Framework. “As we move to embrace new standards, we will see more and more integration of new courses to the curriculum, one of which is economics. Elective courses will offer more complete business and financial learning opportunities, including an AP-level economics course.”

Tyler Lipman, 21, is a Baltimore local who attended Calvert Hall College High School. Lipman remembers that in his junior year of high school, his social studies course included just “basic business fundamentals. We learned about saving money and a little about loans in preparation for college, but nothing in the slightest about taxes or insurance.”

Even in college, he says, the only class related to money at all was economics, although that was exclusively on a macro scale. “I was taught financial skills by my parents as I needed them,” Lipman says. “I learned it all from my parents as the time came.”

“Financial literacy comes from the social studies curriculum,” says Schiffer. “Baltimore County is one of the few local education agencies that already has a graduation requirement tied to economics and public issues.”

Adam Millstein, 21, attended Atholton High School in Howard County. “The only thing I can recall from my public school education relating to finances and how to deal with money was a single history class where one of my teachers went over credit cards and how insurance rates worked,” he says. “I wish I was told about taxes, mortgages, stocks and bonds, investments, how to properly save, etc. Now I have to figure that out on my own or take classes on it in college.”

With the new standards, students have started learning more about financial issues and economics earlier. “There are grade bands explaining what students should know by the time they have finished certain grades,” Schiffer says of the incipient curriculum.

These grade bands are outlined in the new framework. The C3 stands for college, career and civic life for social studies state standards. According to the program’s outline, “Economic understanding helps individuals, businesses, governments and societies choose what resources to devote to work, to school and to leisure; how many dollars to spend, and how many to save; and how to make informed decisions in a wide variety of contexts.”

Under these new, state-wide standards, students will learn about economics in four core areas of study: economic decision making, exchange and markets, the national economy and the global economy.

The goal of adopting this new program is to leave students with necessary financial skills before they would actually need them. For example, by the time students reach fifth grade, they will understand concepts such as interest rates and inflation, and be capable of comparing the benefits and costs of individual choices. (The better to put those allowance decisions into perspective.)

By the time students have completed high school, they should be able to analyze economic issues in terms of cost-benefit to construct arguments for and against specific solutions. Although aimed at providing students with an understanding of general economics as opposed to personal, the idea is that expanding the curriculum to encompass basic economic and financial skills at all grade levels will positively impact the financial literacy of future generations from the get-go.

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