School teaches loans as a a way of life

[Flybye]

I wish that I would have learned about loans and interest. I hope that my kids get the opportunity to learn more about them.
I am extremely frugal and have had to take a loan to purchase more than one car, student loans to go to college, a loan to purchase a home, and an occasional loan to purchase an appliance that died unexpectedly when we were low on money (I am thinking about saving a lot of money to go on a trip to Kauai and hopping off of the plane and coming home to find our water heater dead).
I would highly doubt that your daughter's teacher has an underlying desire to teach her that she is to be subjugated to men and that if she does not have a car loan she is a failure. She is simply trying to simulate real world situations that students MIGHT find themselves in coming up in their future. I would suspect that there was some discussion about other alternatives and that for the sake of the assignment, these were the instructions to be followed.
She picked a few good things for the kids to experiment with - most high school kids want a car, and most high school kids want a relationship - most high school kids think that they can live on love and a dime in their pocket.

[tulip]

I wonder if you could talk to the teacher in a non-confrontational way...in a way that would improve the class instead of criticizing it. I think it's GREAT that personal finance is being taught AT ALL. It certainly wasn't even mentioned when I was in school, and that's too bad.

But, what if you could suggest improving the class in the following ways (if the teacher won't, at least you could work with Nell for a more complete picture):

Each kid gets a certain amount of money. If the teacher insists on the marriage thing, that's okay since it's reasonable to assume that most of the kids will end up getting married or sharing financial responsibility with someone.

Each kid can have options of what to do with that money: buy a new car with a loan, buy a clunker with cash, use public transit or bike, buy a house, rent, etc. They would also be required to put a certain percentage away for savings--and show how that savings grows with compound interest and regular contributions.

That's pretty complex, though, so maybe the teacher is trying to simplify things for the sake of teaching the basics. Is this just a segment of the class, not the whole class? I mean, I assume if they are learning how loans work, they will also learn how savings works, right? So maybe looking at the whole class instead of this segment will reveal a more balanced approach...I'd be interested to know if that is the case.

But really, any exposure is good in my book. You can always pick up the slack at home if it's important to you. My family never spoke of money, and I'm pretty much still in the woods about it at age 42.

[OakLeaf]

really, any exposure is good in my book. You can always pick up the slack at home if it's important to you. My family never spoke of money, and I'm pretty much still in the woods about it at age 42.

+1... at 50... and well aware of the position I put myself in by letting DH take care of all of that.

[Veronica]

I know my 5th graders seem to think that they will have enough money to buy a brand new $60,000+ automobile and rent a really nice condo all without going to college. I've got one boy convinced he'll be a football star, even though his grades are in the toilet because he refuses to do anything that involves writing or reading. He's sure he's so good that he'll be allowed to play on the high school team anyway and get recruited right out of high school. I've watched him play... I don't see those superstar qualities yet. But he is only 10.

Children really don't have a clue what things cost, groceries, utilities, gas... They just don't think about it. Anything that gets them thinking about money beyond borrowing it from you and spending it, is good I think.

Veronica

[Zen]

The marriage aspect is puzzling. The same lesson can be taught with that part left out. It also complicates things because tax rates change based on marital status.

[OakLeaf]

I do think it's good for kids to know that legal marriage (as opposed to spiritual and emotional commitment) is mostly about money. Just getting a lump sum is obviously a gross oversimplification, but hopefully it will spur discussion...

[shootingstar]

Children really don't have a clue what things cost, groceries, utilities, gas... They just don't think about it. Anything that gets them thinking about money beyond borrowing it from you and spending it, is good I think.

Veronica

Well Melavi, at least your daughter went through the financial planning exercise, even though the scenarios didn't get the students to stretch their options of how to fit in consumer habits in relationship to personal values. (ie. alternative transportation vs. car).

Over the years, I've been intrigued how other people grew up in their family, quite ignorant of their family's financial situation. I was aware of my father's salary starting when I was around 12-13. I was told this stark fact because my parents were saddled with a house mortgage and 6 children.

And I knew the cost of the house also at that age.

and why we didn't have a car until I was 15. (I am the oldest child.)

and why we were refused money allowance as kids, why we couldn't go out even to buy penny candy, etc.

and why my mother sewed alot of our own clothing. Then she made sure her daughters learned how to sew. We wanted to because we wanted to be in fashion.

and the fact neither parent whipped out a credit card to pay for their purchases.

and why we ate lousy meat cuts, etc.

It is really important that parents model for their children, good spending and saving habits. But also equip them with skills and activities where saving money doesn't have to be continuously onerous.

I could trust any sibling to manage my money, when I reach that stage in life. Seriously. It is one area I know for certain we all share in common..saving money after watching parents work their butt off.

[Triskeliongirl]

Melavi, I think you are over-reacting. The point of the project is to help these kids understand how much it really costs to live, and I think that is a good thing. It doesn't mean the lesson can't be continued at home, that you can't discuss how much money could be saved in interest by saving first for the car and buying it with cash, or buying 2 bikes and 1 car, etc., buying a clunker (but then factor in repair bills and reliability).

Our kids didn't really learn this until our daughter graduated from college and got her first job and apartment (which she is sharing with our son and a third roomate to reduce costs......). I think since we grew up poor we tried to protect our kids from this stuff, but it is good to understand what it costs to have various lifestyles, since this can factor into decisions about what careers to pursue, etc.

As an aside, I don't have any problem with marriage (about to celebrate our 25th anniversary) but again what you want to teach your children is your perogative as a parent. But it is a fact that expenses per person are less when 2 adults share resources and expenses, so what is wrong with them learning that.

[MomOnBike]

I remember a similar exercise my daughters did in Jr. High. They were given a budget and a list of things that are pretty standard for life in the modern USA. It was an almost real-life lesson in budgeting for them, and I was glad it was a part of the curriculum. At least something resembling budgeting was being taught.

I found it interesting the way the two approached the lesson. Elder daughter took her (small) budget and squeezed each penny 'til it turned blue. She had problems spending it all, actually, and the teacher insisted that all the money be spent. The other daughter had the reverse problem, running out of money far before she had everything - of course, the muscle car had something to do with that.

I'd say don't sweat this. No matter what else, your child will probably learn that money spends faster than you think it will - unless she's like my elder daughter.

[sgtiger]

*stepping on the soapbox

As a parent, I think it's our job to teach our kids the skills and values that we want them to take into their adulthood to help them be successful in pursuing their goals. And I think that we need to supplement our children's education as we see fit in order to make sure that they are receiving a balanced education. We are, also, able to give them the one-on-one time that is valuable in meeting the individual needs of our child. Things such as personal finance should really start at home anyway, even if it's to show our kids what not to do. With so many resources out there, it's not so difficult to educate ourselves if our knowledge is lacking so that we can better guide our children. I think that children appreciate a frank discussion of those matters even if they may not always seem like they are listening.

Our already taxed school systems can only do so much. I think the fact that some schools are teaching personal finance at all is to be commended. There still are many school districts that do not even broach the subject. Hopefully the children for whom their parents have not managed to teach them about it will get at least an introduction to thinking about how they will manage their money and get a discussion started in their own homes or with their peers. (Yes, sometimes teenagers do talk about such matter amongst themselves.) I think it's always a good idea to contact our children's teachers about any concerns we have. I'm finding that all the educators I've contacted are all too happy to have parent involvement and willing to share their curriculum notes. And most educators I know are happy to get feedback from parents and students so that they can make improvements to their curriculum for the future.

I know for myself I'm thankful that my dad involved me in the monthly budgeting of expenses. It was something that we started to do together when I was twelve. I think it helped me to have more realistic expectations of what my necessary expenses after high school would be than most of my peers at that time.

By the way, Veronica and others educators on the board, I highly appreciate what you do and admire that you have the strength of will and character to do it. There are some days that I can hardly manage my two children. I can only imagine what it's like to have to try to both educate and manage so many at once whose individual needs and capacities vary.

[Owlie]

I wish my high school had covered a bit more than it did. We spent an age learning how to write a check and balance a checkbook . We did learn how to fill out the simplest of income tax forms and the basics of credit cards, but not a whole lot else. Though I must say that the credit card discussion scared me away from ever wanting one. The "monthly budget" thing would have been helpful, as it's not something I was ever really exposed to. I went shopping with my mom, but never really paid attention to the cost of groceries until I got to college, went off the meal plan my junior year and started having to buy my own.

[zoom-zoom]

+1... at 50... and well aware of the position I put myself in by letting DH take care of all of that.

Yep...I'm almost 37 and pretty clueless about money, because I didn't grow up with any example of how it should be handled--at all. Luckily my hubby comes from a family where money management was just something they did and these people all move into retirement with some relative degree of wealth. But it scares me. My parents are both 65 and have almost no savings...and have never owned a house and are now pretty much f'd, since they have no choice but to keep paying rent. They can never retire. That's enough to scare me straight!

I wish my HS would have had more than just a unit on how to handle a checkbook. I could have really benefitted from understanding loans and credit cards and wise money management practices. $ matters make my head spin, now.

[ginny]

hmm....Mel, I agree that the teacher is backing old stereotypes with the 'marriage' thing. I also agree that there are other options to having a car... I see the benefit of teaching personal finance, but I think those two points above are troubling. I'm sure that (was it Tulip?) is correct thinking that the teacher is trying to simplify things, but if it was my child in a course like that, I would be inclined to make some waves. I like that your child practiced the line about marriage - love it, in fact! Would have loved to have heard the report had she delivered the line. Personal finance is one thing. Perpetuating puritanical belief systems is another. Maybe the teacher could give options to which kinds of loans the students have to take out (student loans with slightly lower interest rates than car loans... credit card debt with twice the interest rate of the next highest loan...) - and lose the marriage thing altogether. That seems really entirely superfluous to the actual lesson to be learned.

[Veronica]

I don't think my marriage is outdated and my husband does make significantly more than I do, mostly out of career choice. Given those facts, I still don't feel "subjugated."

I love how non teachers try to second guess a teacher's lesson plan. "I'm sure it could be done better this way." Fine, get into teaching and do it your way.

Teaching is a fine balancing act. Have you considerd that the teacher may need to keep it simple so that all the students can grasp the concept. Hmmm... I bet that teacher still has some kids who don't know their basic math facts and can't read beyond a third grade level.

Veronica

[Trek420]

She picked a few good things for the kids to experiment with - most high school kids want a car, and most high school kids want a relationship - most high school kids think that they can live on love and a dime in their pocket.

I agree, it's a good place to start. The teacher can't cover everything that could occur in these imaginary lives and budgets. Let us know how it plays out and what situations/discussions come up. It's a good start and nice idea to teach a lot of subjects.