I missed this New York Times article by Paul Sullivan on money camps for kids, but my classmate Kelly was thoughtful enough to share it with me in class today. Thanks Kelly! I’ve been toying with a few ideas for my thesis. At the moment, my most well-thought out topic is documenting the South Asian diaspora, but I’m not fully committed to it yet. I realize I have commitment issues (hah), but articles like this make my mind spin in a different direction…
According to the National Endowment for Financial Education, most teachers do not feel equipped to teach students about personal finance, even when states require it. A study published in 2009 by two researchers at the University of Wisconsin, Madison, called “Teachers’ Background and Capacity to Teach Personal Finance,” found that 80 percent of states had some sort of requirement for personal financial education, but that most teachers did not feel qualified to teach a financial literacy course. [Paul Sullivan, NYT)
The 2008 credit crisis occurred for many reasons. Many mistakes were made, ones that shouldn’t be repeated. Scarily enough, I’ve come across many people, who to this day, can’t articulate what went wrong, just that it ended badly.
Those who cannot remember the past are condemned to repeat it.
You could argue that my background makes it easier for me to understand, but the concepts involved aren’t exactly rocket science. The problem lies in our schools and universities – they don’t offer any sort of financial education other than to those majoring in finance. And even then, it’s a lot of market theory, not practical, real-life sense.
I’ve seen college students bounce checks and rack up huge credit card bills. I’ve worked with people who contribute to their 401(k)s without any understanding of what a stock is. Subsequently, they were the ones hurt the most when credit card rates went through the roof and retirement portfolios took a nosedive.
I believe that learning about the ancient Romans, making sentence diagrams and understanding molecular biology are an important of education. But so is financial literacy. Yet, it isn’t being taught. Thousands of Americans were taken in by dishonest brokers and banks in the lead up to the crisis. I strongly believe that not as many would have taken on risky mortgages if they had basic financial knowledge.
I think design can play a role in teaching people of all ages basic financial concepts. It’s something I’m interested in exploring more, even if it’s not for my thesis…