By Dr. Bill Bosher, NBC12 Educational Specialist
RICHMOND, VA (WWBT) - Recently reported in a Wall Street Journal article, a Capital One Financial survey of 500 high school seniors indicated that they did not feel prepared to manage their personal finances.
Virginia, based upon national analysis, has the most rigorous economic education standards in the country. Students at every grade level are taught the theories and practice of the free enterprise system and personal finance. In elementary school, they are exposed to terms like opportunity cost, supply/demand and the law of comparative advantage.
Of the 500 young people surveyed, about a quarter responded that their parents were the primary source of financial guidance. So what can we do to improve this number?
The Wall Street Journal article had some good suggestions:
For elementary children, give allowances but require that a portion be set aside like "taxes;" encourage savings and target a fund for specific purchases like a game. Teach budgeting skills by planning for a trip and distinguish between "needs" and "wants."
Nikki Waller also says that high school students should be shown family bills: cell phone, utilities, taxes, and mortgages to explain how they are paid on a monthly basis. The article quotes Adam Bold of the Mutual Fund Store, "There's nothing wrong with the kids seeing the bills and understanding that when you flip on the light, that's not free."
While the Virginia Council on Economic Education and the Board of Education continue to work at improving our standards, use the summer to help your young people to understand that the best antidote to a crash is a plan.