Credit Cards and Kids

Another Generation of Illiterate Consumers?

Credit cards and kids can be a dangerous mix and it's our own fault.  In theory, when a kid graduates from high school the educational system has prepared him or her to go forward with advanced education or to join the workforce.  In other words become at least a partially independant adult.  Unfortunately, we don’t spend any time instructing them in how to handle the money that they are about to earn and spend.  Currently there are only 7 states that require completion of a personal finance class as a requirement for graduation.  We are growing another generation of illiterate consumers.

According to the National Council for Economic Education, 43 states have set standards to include Economics as part of the high school curriculum.  However, only 23 states have actually implemented those standards.  Personal finance is typically a component of and Economics course.

It’s not surprising then, when a high school junior got a part time job in a Minneapolis mall thinking she could save up to buy a car, found herself living paycheck to paycheck instead.  Having money she never had before, she found herself buying clothes, lunches and other things that ate up her check.  She had a painful but practical lesson on the difference between things that you want and things that you need. 

The fact that we are in one of the worst debt crisis in our history can in part be blamed on not educating a consumer economy on how to consume.  With money for education at all levels declining, it is highly unlikely that this important life skill will see any increase in state’s curriculums.

On solution that Oregon has come up with is the use of volunteer teachers.  Members from the business community volunteer to teach during “study hour”.  The class has no formal recognition but at least the students are exposed to some basics.

It is going to take creative solutions and the volunteerism like Oregon’s to make any impact in turning out graduates who do not immediately go into debt.

By the way, "Don’t Buy Stuff You Cannot Afford” is actually a SNL video starring Steve Martin and is a good lesson regardless of the “student’s” age.