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Subprime Financial Education?

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With the collapse of the subprime-mortgage market—and the crisis it has created for the economy—there have been calls for schools to take on yet another task: financial literacy. Many are, apparently, if you consider that more 20,000 high school students in 20 states took the Financial Literacy Certification Test this year, according to WISE, or Working in Support of Education, a nonprofit that promotes financial and business education.

About three-fourths of the students who've taken the test since it was introduced in 2003 have passed, a statistic that may help improve the bottom line:

"A national survey of 12th graders found that over 68% failed to understand the basics of personal finance," according to the Financial Literacy Coalition in New York. "The largest group filing personal bankruptcy is young people ages 20 to 25."

After reading this series in The Washington Post about the housing bubble, it seems that many of the people who received loans that were well beyond their means either weren't equipped to understand the commitment they were making or were completely in denial of their own fiscal reality. Too many put undue faith in their loan officers, who too often gave their clients an overly optimistic view of their debt thresholds.

A bunch of groups are now trying to build the foundations of financial literacy early, as I described in this story from a few months back.

Are schools finding time for these kinds of courses, lessons? Anyone know if states are requiring financial education? Should they in light of the current economic picture?

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I have many important jobs as a father. Not only am I a provider for my children, but I am also a nurturer, a teacher, disciplinarian and guiding force. The way I look at it, I am not only here to help my children learn and grow, but I am also in control of the structure of my children’s future. One of the most important must-have methods is financial responsibility. This is particularly of importance during today’s global economic crises. I believe every child should learn hands-on concerning financial education to prepare them for their future as an adult. The learning process begins at a very young age and parents need to understand that they are their children’s first teacher. There are so many resources that are available to accommodate you to effectively teach your children on this critical matter. With the help of wikihow articles like this one, I hope to teach my children not only how to prevent or protect themselves what a disaster strikes, but also on how to be responsible and manage valuable resources. The author makes a brilliant point at the end of the introduction. Adults are worried about what’s going to happen. After the lights turn out, many adults stay up at night worrying, concerned about many things like how to come up with more money to meet the mortgage payment. While we boil inside wondering if jobs are going to be stable or if investments are still going to be there, children observe us. They probably do not understand the enormity of such worries but they can see and feel it. Even still, they look to their parents for emotional support and guidance. We must not allow our problems to weight us down and shut ourselves off from them for they worry when they see us worrying. Children do not have the same degree of biochemical brain development to correctly manage the toxic brain chemicals that form by feelings of anxiety. It is, through proven studies, severely damaging to a child if too much anxiety or worry is left unchecked. Margot Sunderland’s “The Science of Parenting” is a brilliant book that goes deeper into this matter. Although you’d probably think it’s not as important, take the initiative to discuss financial issues with your children. Coach them while they're young. They deserve to be trained to understand the importance of saving and having a plan. From the person they’ll become to relationships they’ll form, this important characteristic will affect the future of our children. Credit repair should not be the model for their financial future. Instead, instill strong, lasting credit as their model.

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