School teaches loans as a a way of life

[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.

[lph]

For some reason I have this terror of not being able to pay bills, and of being (unplannedly) financially dependent on someone else. So I'm a total nazi when it comes to budgeting and household finances. Not that I don't spend money, I'm more of a spendthrift than my dh, but I know it when I'm spending, and I know I can afford it. I will never forget one of my neighbours at uni asking if I could please chat with her dh about this, because he was getting very closed about this and wouldn't tell her how things were going. It turned out that he'd lost it completely, he'd stopped opening mail and had at least one full shopping bag full of unpaid bills.... It was terrifying! He wouldn't let me help much, but I showed him some practical tips and they finally got help from a counsellor. (And got divorced, whole 'nother story but his financial irresponsibility was definitely a large part of it).

So you bet, my son is going to leave this house with a working knowledge of how to set up a household budget, how to set money aside for regular bills and have them paid directly, and how to never ever buy things on credit unless they're an absolute necessity. And to never believe a bank that wants to lend you money.

[sgtiger]

Melalvie, it just occurred to me that there may be a method to their madness. Perhaps it's to illustrate that they can't live in either situation for very long without needing more resources if they dig themselves into that financial hole?

I don't know about the demography of your area but in the school district I graduated from there is a pretty high rate of teenage pregnancy, kids dropping out of school to get jobs and start a family, or doing so upon graduation. Can you believe it's considered one of the better school districts in the area? I know when I graduated from high school there were quite a few of my friends and acquaintances who were either pregnant, had been pregnant, planning to get pregnant, or had gotten someone else pregnant. Most of them did get married right after they graduated and only one of those marriages that I know of has survived. It's really surprising to find out how many of my fellow classmates have children that will be graduating from high school in a year or two. Sure, I have one that is graduating this year; but I got him the easy way: potty-trained, well behaved and I got to send him back to his mom after playing with him. My stepson attends the same high school I went to and things have not really gotten any better. So perhaps it's a double lesson for those who would make that choice that there is also a heavy financial burden along with the other responsibilities that come with making it?

[smilingcat]

In this exercise, are there any consequences on paper for making bad choices. e.g. bankrupt? If not what is the point of this instruction?

The concept of "power of compounding interest" is not that hard to teach in my mind. And if the game allows you to as some have said, to take alternative means of commute: walk, bike, mass transit instead of used car and then apply the power of compounding interest on the savings, I think the instruction will be very worth while. You can see how you can have your money work for you or against you.

Most people who get rich, get rich by having their money make money for them. And be frugal.

As for marriage thing, does it include partnership? and not just roomate.

[Tri Girl]

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.

That is SO true, but sadly- many times it NEVER happens and we educators have to try and teach the most basic things that we shouldn't *need* to (manners, respect, fiscal responsibility, etc).
Take it further with Nell, and have her do something similar at home with YOUR values and ideas. She may get more out of it with your lifestyle/values added to it.
Sadly- *most* people aren't taught this growing up (I wasn't) and end up in big debt because their eyes are bigger than their wallets (ahem: foreclosure problem currently-living beyond your means).

I teach something similar in my middle school class. I also have added the stock market as a learning tool. Students are given $100K to invest in the stock market and their grade depends on how well they do (given certain criteria too lengthy to discuss here). They monitor their stocks weekly and track their progress.
It's a good lesson in life. I had one student who bought $20K worth of stock, and not a week later the company sold out to another company and he lost all his money when the stock became worthless. A lesson in life that many adults have encountered- only with real money. He now said he'll research a company more before buying (something they were instructed to do).

Anywho- if you're really concerned about it, go speak with the teacher, but please keep in mind that I'm sure she's trying to do the best she can to teach them basic budgeting principles. I'm sure she's not trying to bring down the women with archaic thinking (which is subjective because I don't think marriage is, for instance).
Sometimes you have to make lessons like this as basic as possible because, like V said- there may be kids who don't even know how to add or read well at that age and you want them to get something out of it, too.

Just my $.02 as someone who creates lessons and then is CONSTANTLY questioned about my intentions and motives- even if there aren't any ill ones behind it.

[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.

[tulip]

Wow, I'm really impressed at how many of you had any kind of financial education in school--even learning how to balance a checkbook. I had nothing remotely like that, and ended up getting asked to leave by my bank my freshman year in college because I had bounced 18 checks

I had never had a checkbook before and the cursory lesson about balancing a checkbook obviously did not stick. Neither was it paired with any discussion of a budget, so I did not learn to prioritize what I wanted and needed to buy.

I went to a very exclusive, high-achieving private high school. Perhaps they figured that all the kids there had financial ed at home. I did not--my parents were at work all the time to pay for the high school and had no time to teach me stuff at home. I hope they teach this stuff now.

[Tri Girl]

ended up getting asked to leave by my bank my freshman year in college because I had bounced 18 checks

I'm right there with you! My bank didn't ask me to leave, but I got a tongue lashing from the bank lady after a number of bounced checks. After I started crying, she changed gears and did some basic tutoring with me to teach me how to keep my checkbook- I was so embarrassed. I thought I was bright- I went to college on a full-ride scholarship for academics. Too bad I wasn't financially smart.
I had NEVER been taught anything like that. I also was given a credit card my first week on campus and that was the start of my credit card downfall for the next 8 years. I had to learn the VERY hard way. My parents worked their fingers to the bone to pay for 8 kids- but I wish they'd taught us how to budget (considering they surely had to be geniuses to support a family of 10 on 2 non-degreed salaries).