I know I said that I would dive into the rich topic of allowance, but first I want to share with you a letter to the editor of the Chicago Tribune that I just finished writing. I wrote this because I feel strongly that people need to take personal responsibility for their financial choices and because we need to reach kids with financial education before it’s too late. Here is what I wrote:
Monday was a most extraordinary day. Not only did foreign markets post significant losses, but at the end of the day, President Bush announced the formation of an advisory committee on financial literacy to be led by Charles R. Schwab, the founder of the financial services firm.
Essentially, the president was saying that what we have known for a very long time: What we don’t know about money can hurt us.
We want people investing [and] we want people owning homes. But oftentimes, to be able to do so requires literacy when it comes to financial matters, Bush said. And sometimes people just simply don’t know what they’re looking at and reading. And it can lead to personal financial crisis, and that personal financial crisis, if accumulated by too many folks, hurts our country.
The subprime crisis has proven that. And, while the idea of an advisory committee is a good one, most of us cannot afford to wait and hear what the committee says. We need to do something now. As adults, we need to take personal responsibility for choices we make with our money to spend it, save it, donate it or invest it. As parents and grandparents, we need to pass those lessons on to the kids we adore. If we don’t, America will never break the cycle of financial illiteracy that has led us to this sorry state.
One member of the newly formed committee is Laura Levine, executive director of the Jump$tart Coalition in Washington. Jump$tart.org is the place to start to find ideas about teaching the children in your lives how to get smart about money.
While we applaud the decision to form the committee to focus on financial literacy education, we don’t need to wait on the committee for solutions. There are many, many solutions already out there that work and you can find them on the Jump$tart website.