Studying Consumer Math and Financial Literacy with my high school junior in our homeschool this year, I’m discovering that a lot of things are not obvious to him and to his friends of a similar age. I guess I thought he automatically absorbed information simply by living in the world we live in, but there really are a lot of these issues that evoke a response of , “Oh, really? Okay, I never knew that.”
High School Consumer Math
Some of the things I’ve been having to explain:
1. There is no ONE right way to manage personal finances.
Stewardship of all that God has entrusted to us is a very personal endeavor. Teens need to be taught this principle, and encouraged to understand the foundational wisdom of stewardship rather than given a Budget Worksheet and told that these columns hold the answers to financial security.
2. Many of us do not actually own our houses yet.
The idea that having a mortgage means that a bank actually owns the house may have to be explained. We refer to ourselves as homeowners when really we are long-term-home-buyers if we have a mortgage! The scope of time involved in a 20 or 30 year mortgage is mind-blowing to many teens.
The payments you make on a car loan go almost entirely to pay interest with very little principle paid down in the early months. This can be quite a shock to a young person who buys a car on credit without understanding this first, and thinks the total of the payments they’ve made in six months has actually paid off a large amount of the loan principle.
4. A college degree does not necessarily mean a higher starting salary.
Regardless of the importance you place on a college education, many entry-level positions in fields that require a 4-year degree do not pay all that well. Understanding this before committing to enrollment in a university should be required.
5. Parents sometimes don’t have much money…really and truly.
By the time our kids are in their teens, we do well to be courageous enough to share honestly with them a fair amount about our own financial situations. The amount of detail you share is, of course, a personal decision, but helping them understand reality before they step into adulthood means having some sort of accurate feel for whether or not their parents are comfortably well-off, working hard to be secure for retirement, struggling to pay off debt, or living with ever-increasing debt. While it may be humbling, it will also be empowering for them to have a realistic view before the bills show up in their own mailboxes.
Here’s a neat list of “Financial Milestones” and suggested ages at which it might be wise for your children to reach them. It’s just CNN’s opinion, but I thought it was interesting food for thought:
What lessons about finances are you teaching your teens?
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