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Health education is required at my children’s schools. Personal, physical, sexual, and even environmental health is all part of the curriculum. But what about financial health? While some high schools offer elective courses in investments and banking, most do not. The assumption is that kids will learn about money along the way and that their parents will guide them.

Their parents? My generation teaching the younger generation about money? My generation collectively lives beyond its means. Our national savings rate has dwindled from almost 10 percent of personal disposable income in the 1960s to close to zero this decade (source: U.S. Bureau of Economic Analysis). Debt levels per household have soared and the amount of disposable income used to service interest payments have grown correspondingly. I’m sympathetic to the demands put on people’s paychecks these days. Wages have stagnated over the last decade while costs keep rising (until the recent downturn in prices). But nonetheless, those of us who are baby-boomers or post baby-boomers have not demonstrated that we are financially disciplined or literate enough to teach our children.

One reason it is so important that kids learn about personal finance before they finish high school is that there are predatory financial industries out there positioned to take advantage of financial naiveté. The New York Times recently reported (The Debt Trap: 12/31/08) that banks are paying several universities for data on students so they can offer them credit card deals. The greater the number of students who sign up for credit cards, the more these universities get paid. The predatory nature of mortgage lenders has also been widely reported of late due to the burst of the housing bubble.

So if school-age kids cannot rely on consumer protection or parental example to keep them on the right track financially, school may be the best place to learn the ABCs of financial literacy. I’d rather have my kids learn about the power of compounding interest rates in a classroom than in a bankruptcy court.

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