Money Management In Public Schools?
I recently read an article that talked about how Cincinnati Public Schools plan to start teaching money management classes, in grades K-12, starting in 2014. Now on the surface, this doesn’t sound like a bad idea, but I think that there is another way of looking at it. Personally, I believe that while teaching kids about money is important, I think that it is more important to know who’s ideas about money management are being taught.
My objection isn’t that money management will be taught, it’s about what that will include. If they are just talking about basics, then maybe it will be fine, but if they teach our children the same “you have to build credit” in order to have stuff idea, I am strongly opposed! We all know that the Government is completely inefficient when it comes to managing money, so do we want our kids to learn those same ideas in the classroom? (Massive debt loads, wasteful spending, …you know the deal!)
Some of you may not know this, but I am not a big fan of the FICO credit system, since that system creates outrageous incentive to borrow and keep borrowing. Something I remember being “indoctrinated” with was the fact that I HAD to build my credit in order to own a house or a car. That is simply a lie, but that is what is spread around as truth. If they are going to expand on this lie in the classroom I think that it could make things even worse for our children’s future. Stick to the basics and I am okay.
What I Consider To Be Basics
- Importance of Savings
- Importance of Budgeting
- Becoming Informed Consumers
- Debt and Risk (The truth)
- Understanding Investments & Compound Interest
- Benefits of Giving
A curriculum I support: Foundations in Personal Finance
Stay away from teaching students how to obtain debt! The curriculum must be based on educating the students on how things work, not what they should or shouldn’t do as far as borrowing or investing! There are too many dangerous opinions out there already. The basics would provide a place to start, and leave room to expand on those ideas as they learn and grow.
Children Become What They Learn At Home, Not At School
Now I am sure there are some exceptions to this, but for the most part I think it is true. I believe it is our job as parents to be an example to our kids. If we are out there borrowing money for everything we own, then the chances are at least greater that our kids will do the same. Learn how to manage your own money properly so that you can teach your own children sound money principles. Remember, you can teach them the right way, but if you are still doing it the wrong way, you are wasting your time!
PLEASE do not rely on a school system to do this for you. This would be a huge mistake, and one that could lead your children to struggle with money the way you have. One thing for sure is that I do not want my kids to even come close to struggling with money the way I have over the years. I wouldn’t wish that on my enemies, or their kids for that matter! Take the time to educate yourself about money, so that you can spread a message of hope to your children and future generations!
A Good Place To Start
Adults
The Total Money Makeover by Dave Ramsey – $10 Sale (or get it from your local library)
Financial Peace University – This 13 Week DVD based course is essential! (Lifetime Membership for your entire household)
Children
Young American Center For Financial Education – Great site with helpful tips and advice for our youth.
Junior’s Clubhouse – Loaded with interactive books, games and resources to make money management fun!
Financial Peace Jr – Money management system for ages 3-12! $10 sale
These links are provided to help you take control of your finances. I do not get paid if you visit them OR buy anything. I hope you find them useful!
Broke Financial Gurus? No Way!
It’s true! You can be considered an expert, but that doesn’t mean you will not struggle with the process itself. It doesn’t mean that discipline is automatic. and most of how you handle your money is behavior anyway. We know exactly what it is that we need to do, and why, but even we still have problems when it comes to following through at times.
Why is that the case? For starters, we are human which means we can mess up, and to me there really is no other explanation needed. Whether it’s impulse spending, eating out, forgetting irregular bills, or spending our money on whatever our weakness happens to be, the truth is we will eventually have a weak moment. For me, I love to buy books, and even though I budget for this category on a monthly basis, I still have trouble when finding out about the latest book that I must have! Sometimes I am good and sometimes I am not!
Now my wife and I, have another issue that plagues us. It’s called eating out, and sometimes depending on our schedule, it can get bad. For instance, last month, we should of been able to pay off an additional $250 in debt. That $250 was used to grab the quick and easy meals when time just seemed to be against us. If you break that down, it is really only going out to eat about eight times if you include tip. I work for tips, so for us to tip at least $5 is not unusual at all. This does not include money from our grocery budget that we used on eating out, instead of buying groceries. (We have NO excuses, we were bad last month!)
I am not telling you this because we are broke, because we’re not. In fact, we have an Emergency Fund, and are killing our debt slowly but surely. (At least it feels slowly) Slow progress is still progress, right? I am telling you this because sometimes you will fall off the wagon, but the key is to jump back on and start killing it again! This blog isn’t just for you, it is also a reminder for me to stay focused. Ultimately, I am just like you, and I have weaknesses, but together we can help each other. “Hi, my name is Brad, and I am a recovering spend-a-holic!“
Things to avoid:
- Carrying your debit card everywhere you go – 9 times out of 10, if we did not have our debit card with us, we would have come home and cooked a meal instead of go out to eat. If at all possible we try to use our debit card only for paying bills, but as you can see that does not always work. Try leaving your debit card at home! (You should assume that credit cards are a NO-NO as well, and for more reasons than what I talk about in this article!)
- Giving Up On Your Budget Once You Mess Up – It’s really easy to just throw in the towel when you feel you have failed, but it is important to regain control and fast. The longer you go without balancing your budget to compensate, the quicker you will run into more problems. Sometimes if we have messed up really bad, we will redo the entire budget for the rest of the month with our remaining income. This helps A LOT!
- People That Say They NEVER Make A Mistake – To believe that someone has never had to adjust their budget because they made a mistake is absurd. These kind of people will do nothing for your self esteem, so I suggest that if someone starts talking about how perfect they are with their finances, just walk away! While some people may mess up less frequently, or have more discipline than others, no one is 100% perfect at anything.
- Window Shopping – Most often when I buy a book that wasn’t budgeted for, it is because I decided to go “look around.” Avoid it! You are more likely to impulse buy when you are in the moment, and the “I need it” part of you decides to take over. If you find that you have given in and wake up the next day with a little buyers remorse, find the receipt, and take it back immediately! You feel guilty for a reason! We have returned many things because of this, and we always feel better when we do!
I wrote this blog to reassure those of you who wonder if anyone else is struggling with the same thing you are! It’s not the first time and it won’t be the last! As a matter of fact, I would like it if you could share something you struggle with from time to time when dealing with your finances. What tips can you share with us that will help someone avoid, or better deal with their situation?
1. Maintain An Emergency Fund Of $1,000
This is very important! If you do not have an adequate emergency fund when life happens to you, you will feel defeated. It has a very negative impact on your desire to budget when you have to reorganize EVERYTHING to pay for emergencies. If you have an emergency fund all you have to do is cover the emergency without reorganizing the entire budget.
2. Remember That You & Your Spouse Are On The Same Team
The friction caused by disagreement will often cause the budget to be a flop before it ever has a chance. Be sure to compromise in order to reach your goals. It is important to remember that it is better to lose a battle in order to win the war. If you push your spouse away from agreeing on a plan then you will never have the traction needed to win with money. You are on the same team and both of you have different roles in the process. Handling the money is not for one or the other to deal with alone, it is a joint effort. Huddle up and agree on your goals, values, and dreams together!
Furthermore, you should check out the movie Fireproof with your spouse. It is a real eye opener and may just help you handle disagreements with love as opposed to anger and frustration. It is not just for troubled couples, it is for everyone. How well do you love your spouse? Find out!
3. Budget Necessity Before Debt
The truth is that we will often make sure we pay our credit cards & other loans before we cover other more important items in our budget. The myth that says we have to build credit in order to prosper, is one reason for this. Another reason is because of the methods used by creditors to bully us into paying before we are ready to. Don’t be bullied and don’t put creditors before your family! Dave Ramsey tells us to budget the Four Walls before anything – especially debt. The Four Walls are food, shelter, utilities, and basic transportation. (If you tithe each month I am assuming that you have taken 10% off the top before budgeting anything else.)
4. Classify & Prioritize WANTS Vs. NEEDS
It is so easy for us to ignore what we waste money on. Probably because the things that are causing our money to vanish are due to things that we don’t really NEED but really, really WANT! There is a difference you know. Try this. Take out a piece of paper and start two columns- one for NEEDS, and the other for WANTS. After budgeting your four walls, take everything else and place it one of the two categories in order of priority. Next, budget the NEEDS until there are no more. (Credit Cards aren’t considered needs but you should certainly pay all minimums on all your bills before buying that speed boat you have always wanted.) Then if you have any money left over, budget your WANTS in order of priority. It is called personal finance for a reason so whatever you decide is fine. However, if you are on a Total Money Makeover, your gazelle intensity will determine how long you remain in debt. Is getting out of debt a NEED in your life, or just a WANT? Your budget will show you the truth.
5. Remember Irregular Expenses
Don’t forget to think about any irregular expenses you may have for the following month when you are doing your budget. It can kill your motivation if you do your budget only to realize that you forgot to account for the auto insurance that renews this month. Don’t forget about Christmas, birthdays, special trips or anything that can throw your budget out of whack. If you use my FREE EOD Deluxe Budget 2.0 for your budgeting needs, I have inserted a place to plug in these irregular expenses so you don’t forget. There is also a savings worksheet to help you keep track of how much you should be saving each month to cover those expenses when they come due.
6. Implement The Envelope System
This happens to be one of my favorite things to use to ensure a happy budget. By using an envelope system for all cash expenses, you will save lots of money. How? Well that is easy! When you purchase something using plastic it does not register as pain, whereas when you use cash you are much more likely to feel the loss. This causes you to ask yourself more honestly whether or not you really need something. Give the envelope system a try and see for yourself. Start off slow by starting a couple envelopes at a time, like groceries and fuel.
Remember, you will never overspend if all you have is $50, but when you use the debit card it is very easy to say, “It’s only a few dollars extra”. That is not spending with a plan which is what the budget is in the first place. Don’t nickel and dime your budget to death by not following your plan. A death by 1000 cuts is still a death!
7. STOP Borrowing Money
This may be one of the biggest tips to maintaining a healthy budget. Resolve to stop borrowing money today, and use cash to buy the things you want. Use the good old fashion method of saving for the stuff you want instead of borrowing. Stop paying more for everything you buy by putting them on credit cards. If you can’t pay cash you can’t afford whatever it is. Dump your debt in order to win with money. Being slave to the lender is no way to live! Keep higher standards for you and your family and the benefits will amaze you!
Happy Budgeting!
That’s How!
Our Children Really Are The Future
If you have children I can not think of anything as important as teaching them how to manage money at a very early age. Think about it for a second. If you would have learned about money at a young age you could have avoided so many of the financial pitfalls that most of us deal with. I know I would have loved to learn this stuff early on. It would have kept me from paying extensive amounts of “Stupid Tax”, as Dave Ramsey calls it. Stupid Tax is money that we pay because we do something stupid with our money. For example, when you buy a car right off the showroom floor, the stupid tax is the money that you lose because of the car depreciating quickly. One way to avoid Stupid Tax in this situation is to NOT buy a brand new car. Instead by a used car and let the person before you pay the Stupid Tax.
With all of the myths that are spread in our ever growing “spend more than you make” society, it is important to debunk these myths before they become engraved in your child’s mind. As always, Dave Ramsey has developed a very good system to help you do just this. This system is called Financial Peace Jr., and is intended for children ages 3-12.
We Should Set Them Up For Success, Not Failure.
By simply investing a little bit of time preparing our kids for financial responsibility we can save them years of struggle. We all know that living paycheck to paycheck is NO FUN! For just $20 we can change the way our family tree branches out, and ensure that even our children’s children have the tools needed to win and prosper. By now we know that the schools do not even come close to teaching our children about how to manage money, so do not leave it up to them. The effort will be well worth it in the end. We have already purchased Financial Peace Jr. for our son and he is only 2 years old. We have even started to incorporate giving him money to put in his piggy bank when he cleans up his toys. He has even used a little bit of his savings to buy his Grandma a birthday present. He bought her a $3 picture cube, with HIS money. Does he fully understand how all of this works? Of course not, but he will. You should consider buying Financial Peace Jr. today and spreading the love early on.
Financial Peace Jr. includes:
- Commission Worksheet (Dry-Erase Board) – Keep a record of all of the jobs your child has done and how much money he or she earned each week.
- Saving to Buy with Cash (Dry-Erase Board) –Your child can choose one item to buy with cash, and when he or she has saved enough to reach the goal they can purchase the item.
- Envelope System (Save, Spend, Give) – Placed the money earned each week in the envelopes so your child knows exactly where his or her money is.
- Clip and Carry Coin Case – Helps your child keep track of his or her spending money and helps you to monitor your child’s spending.
- Instruction Manual – A guide for effectively using the kit to teach your children.
- Instructional Audio Cassette – Provides additional instructions for you and your child.
If you know who Dave Ramsey is, then you know that he is pretty comprehensive in his approach. For adults he has developed a 13 week video based series to tackle everything from saving, budgeting, and buying to insurance, career choices, and giving. Additionally, he has also created a website for kids that has interactive books, fun games and puzzles for kids to use. Junior’s Clubhouse is an awesome way for you to let your kids learn and have fun at the same time. Learning about how to manage money doesn’t have to be boring, and Dave Ramsey proves it.
Some facts from daveramsey.com:
“According to Opinion Research Corp. 95 percent of pre-teens and 91 percent of teens get money from their parents or relatives to spend as they please but only 20 percent of these teens say they save the money as they receive it. With more than 47 percent of children having a television in their room (The Annenberg Public Policy Center), children are being targeted by advertising more than in the past.”
“The sooner kids start learning how to save and manage their money the better off they will be in life. Financial Peace Jr. does a great job of teaching kids the basic principles of saving money. It is so important that children learn the basics especially in today’s world where emphasis is on spending not saving,” said Matt Woodburn, vice-president of Dave Ramsey’s company. “This kit also allows parents to spend quality time with their children while teaching them about money.”
Love your children by preparing them with great financial management skills. Good luck!
**If anyone has actually used Financial Peace Jr. with their children and would like to share their experience, please do. Got tips and advice? Share your knowledge in the comments section.**
![[Valid RSS]](http://i176.photobucket.com/albums/w174/K8lnzdad1996/2009RSSFEED.jpg "Validate my RSS feed")
