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New rules
restricting the availability of credit cards to people
under 21 are an attempt to save them from themselves and
from succumbing to temptations.
I endorse
the rules, but we need to get to youngsters much sooner
than age 21 to give them a firm foundation in managing
money so they don't get themselves in trouble later on.
And we
can't let up, because the need is great.
In its
2008 biennial survey, the Jump$tart
Coalition for Personal Financial Literacy
said high school seniors correctly answered only 48.3
percent of the financial literacy questions posed to
them, down from 52.4 percent in 2006.
"The
consistent message is that young people — high school
students — don't know enough about personal
finance," said
Laura Levine
, executive director of JumpStart, a
Washington
-based group that focuses on personal finance education.
"Kids learn best when they learn at an early age
and a foundation is built."
Financial
institutions have joined the effort, realizing that it's
in their best interest to train their future customers.
Bankers
at BBVA Compass recently hosted financial literacy
education sessions for seniors at
Bryan Adams High School
in
Dallas
.
"They've
seen the customer who comes in with thousands of dollars
in credit card debt trying to get out from under
it," said
Scott Flowers
, district regional executive for BBVA Compass.
"It's real life."
When
teaching financial literacy to young people, a key
component is the presentation. Kids today live in the
interactive world, and that's the best way to reach
them.
Take, for
example, the
Capital One/Junior Achievement Finance Park
, an interactive mobile financial education program for
middle-school and high-school students.
Each
school year since 2006,
Capital One Financial Corp.
and
Junior Achievement
have set up the finance park to teach students about
money management.
After
four weeks of classroom lessons, students in the program
get to put their new skills to work at
Finance Park
, where they're assigned fictional jobs, incomes,
families and expenses.
They
develop budgets they use to make real-life decisions on
things such as housing, furnishings, investments,
utilities, food and savings.
"It
forces the children to look at how much they have and
where it gets spent," said
Kent Eastman
,
Texas
state president for Capital One.
They also
learn that money is finite and that a spending decision
on one item affects other parts of their lives, he said.
To
increase teens' financial fitness,
H&R Block
has donated more than
$1 million
in personal finance curriculum grants to high schools
nationwide. The new program uses a virtual-world game to
give students experience in such areas as renting an
apartment, financing an education and investing for
retirement.
"The
computer-based simulation software is something that
teenagers can really connect with," said
Amy McAnarney
, vice president of the
H&R Block Tax Institute
.
"We
see millions of clients all the time, and we know how
important it is for people to understand their
finances," she said, "and there's no better
place to start than youth."
Lisa Greco
, who uses the program in her travel marketing classes
at the
Birdville Center of Technology
and Advanced Learning in
North Richland Hills, Texas
, said it's been a "really eye-opening experience
for the kids."
The
program has introduced her students to what it's really
like living on their own.
"A
lot of my kids just didn't realize how much there is in
being an adult," Greco said.
These
programs are great learning tools, but parents should
remember that the most important teacher of financial
literacy to your children is you.
Give them
good examples to emulate by managing your money
prudently and responsibly.
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