Children’s Financial Literacy Finally Gets Attention: Bill Reynolds

Guest Columnist Bill Reynolds is Chief Financial and Administrative Officer of the Boys & Girls Clubs of Northeast Ohio. He holds a BA from Baldwin Wallace University and an MBA from Indiana University.

He calls it the “$ 100 Bill Challenge”.

Financial literacy advocate and author Mac Gardner recently told CNBC he showed elementary kids a $ 100 bill and asked them what to do with it. Nine in ten people say they would use it to buy something, avoiding options to save, invest or give.

It’s not surprising.

Most children learn early on that money is for consumption – and this lesson continues into adulthood. That’s why it’s heartening to see that the Ohio Legislature recently enacted a new law requiring all public high school students in the state to take a self-sufficient half-credit personal finance course before earning their graduation. diploma.

The first group of students affected by this requirement are those entering ninth grade in 2022. Ohio is the largest state to enact such a law.

Our kids shouldn’t step into the adult world without a working knowledge of how to budget, save for major purchases, use credit cards responsibly, understand taxes, and plan. the emergencies.

And the parents seem to agree.

In the Charles Schwab Financial Literacy Survey conducted by The Harris Poll, two-thirds (63 percent) of American adults chose financial education as the most important additional graduation requirement for math, English and science, compared to 43 percent who chose health and wellness education. .

The survey also found that 89% of Americans believe that a lack of financial literacy leads to social problems.

And when asked what they would teach their younger children about personal finance based on what they know today, Americans answered the importance of saving money (59% ), basic money management (52%) and how to set and work towards financial goals. (51 percent)

In our organization, Boys & Girls Clubs of Northeast Ohio, a program called Money Matters has been teaching financial literacy to teens for almost 20 years. The program, created and funded by the Charles Schwab Foundation, talks about saving money, planning large purchases, and avoiding bank charges; plan to live independently, including budgeting; understand all aspects of credit scores; to buy a car; saving for retirement; and read a paycheck.

Our teens also periodically participate in an aspect of the program called the Reality Store, an interactive experience in which they learn how the choices they make about careers, managing income and expenses, saving and investing will affect their lives. future results.

For starters, teens are paid a career-specific salary and manage basic expenses for themselves and their families. They envision the lifestyle they would like to have in their late twenties, explore a career, receive a “deposit” in a checking account equal to one month’s salary, and spend their salary in the reality store on necessities and extras.

They also deal with some unexpected life events and find out if their profession provides them with the financial resources to maintain the lifestyle they want.

Ohio’s law making financial literacy a requirement for graduation is a good step forward. The leap will come when kids who are wise fund managers grow up to financially responsible adults.

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Louis R. Hancock