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Financial Feud: Financial Literacy

Financial Feud

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In Dispute:

Financial Literacy

The Argument:

Is teaching financial literacy worth it? 39 states now have financial curriculum standards in their schools, which means, there's a new teacher in town. We can all agree that we need to know more about our finances, but there's a lot of debate on just how much value there is in financial education.WHO'S RIGHT?

Expert Opinion:

Financial Feud

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The Argument:

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Is teaching financial literacy worth it? 39 states now have financial curriculum standards in their schools, which means, there's a new teacher in town. We can all agree that we need to know more about our finances, but there's a lot of debate on just how much value there is in financial education.WHO'S RIGHT?

Helaine Olen says: 

"Coming out against financial literacy is like coming out against apple pie. What on earth could be wrong about learning about your finances, right? But in fact, what I learned when I looked at it very carefully, that financially literacy had simply become a very personal way of attempting to solve what is essentially an economic and polical problem. Which is that the financial marketplace has become extremely complicated in the last 30-40 years. And at the same time, our ability to keep up financially has fallen behind, with income stagnantion and inequality"

"I think these efforts are helpful, but I think they miss the bigger point, and the bigger point is this: We've been thrown out there, almost defenseless, and we're being told, 'you can master all of this.' And some people can, but many can't, and many can't because of things that aren't their fault. We need to look at the financial structure"

Dan Kadlec says: 

"Long-term, I think people need to be able to fend for themselves. This notion of 'just-in-time' education sounds nice, but it's really more problematic than teaching financial education. The time to learn about mortgages isn't when you're sitting down to sign the document, that would be just-in-time. The time is when you start thinking about buying a house, so that you know what houses you should even be looking at. The long-term solution: Start [teaching financial literacy] in Kindergarten, make it mandatory through 12th grade. Teach it as either part of other courses or as a standalone course, but teach it every year and build year after year as you do with any other subject."

What do you think? Leave a comment or vote!

About the author

Helaine Olen is an essayist and author of book "Pound Foolish: Exposing the Dark Side of the Personal Finance Industry."
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I believe that financial education is a must. Since American businesses have dump the traditional pension plan, Americans must learn how to save for their own retirement or they will be at the charity of others.

I had taken some financial math courses when I was young and learned about interest rates. It is amazing how many people do not understand why a bank lends you money. The company that I work for had a very good benefits director who would beg employees to take advantage of the benefits the company offered such as health and life insurance, 401Ks and later Roth IRAs. To be honest, it took me two years before I understood that I was leaving money on the table by not participating in our 401K but at the time I did not think that I could afford giving up that $30 a week.

Two decades later my company offered Roth IRAs. I seek the advice of a Certified Financial Planner to explain what the best choice for me would be by looking at all of my benefits and investments. This certified person didn’t have a clue about pensions, 401Ks or Roth IRAs, but wanted to sell me MUNI bonds in 2006. I walked away because that was not a plan but a sales pitch and because I was taught a few things over the years, some of which was the hard way, I knew something was not right. To this day I have not found an accountant, broker, or a financial planner that I can trust.

That is why everybody needs reliable trustworthy financial education from someone who is not trying to take your money.

After working with thousands of military members on their finances and teaching personal finance at a local university. This is what I have learned. Most never had financial education till they joined or took a class in college. Most lack good basic math skills involving money story problems (they should be taught throughout K-12). When finances are taught, they usually don't include money behaviors that get them into trouble. This can be taught along with basic skills in school.

Money is complex, people are complex, and the two don't always work well together.

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