Do you agree that we as a country are in big financial trouble? Do you think it would be difficult to find an American adult who would disagree?

At every level, from families to local governments to the national government, we don’t live within our means; we overspend. The mindset of  “buy now, pay later” permeates our culture. We are up to our eyeballs in debt! As Dave Ramsey succinctly puts it:

“We want it all and we can borrow to get it all before we can afford it all.”

Consider these alarming statistics about students who graduate from high school:

• They lack basic skills in the management of personal financial affairs (1)
• Many are unable to balance a checkbook (1)
• Most simply have no insight into the basic survival principles involved with earning, spending, saving and investing. (1)
• Of the 6,000 students who took the Jump$tart personal finance survey in 2006, 62% received failing scores with 60% being the lowest passing grade. (2)
• A study of 1,065 teens found that 21% of 18 and 19-year-olds have credit cards. (2)
• Nearly 1/3 of high school seniors already use a credit card (2)
• By the time they reach their senior year, 56 percent of students carry four or more credit cards, with an average balance of $2,864. (2)
• People in the 18 to 24 age bracket spend nearly 30% of their monthly income just on debt (2)
• More than 1/3 of highschoolers have an ATM card (2)
• Only 1 in 3 teens knows how to read a bank statement, balance a checkbook and pay bills.  Barely 1 in 5 have an idea how to invest (2)
• Fewer than 30 percent of young Americans are given the opportunity to take as little as one week’s worth of course-work in money management or personal finance in high school. (2)

Dave Ramsey, in his book Financial Peace Revisited states on page 18:

“It is almost impossible to get out of high school today without knowing what an amoeba is – now there’s a really valuable piece of information – but few high school seniors can keep a checkbook balanced.”

American youth are financially illiterate! It is imperative that we teach our kids, especially our highschoolers about money with real hands on learning and as homeschoolers, we have the perfect environment to do this. Teach them while they are still home. Let them make and learn from their decisions and mistakes now while they still have the safety net of home to keep them from getting into serious financial trouble.

And… may I be so bold to say that many American parents are also financially illiterate. We as parents need to not only learn about financial responsibility, but live it, as well. We may be teaching kids about money, but are our actions (which speak louder than words) teaching them something different? Are we modeling good stewardship with our finances or are we modeling “do as I say, not as I do?”

Think about this:

•    The average household with debt carries, approximately $10,000 to $12,000 in total revolving debt and has 9 credit cards. (2)
•    In 2005, savings rates dipped to minus 0.5 percent, something that hasn’t happened since the Great Depression in 1932 and 1933.  A negative savings rate means that Americans spent all their disposable income and dipped into past savings or increased their borrowing.  (2)
•    Americans shelled out more than $24 billion in credit card fees in 2004, an 18% increase over the previous year.  (2)
•    More than 1.5 million families filed for personal bankruptcy last year (2)

Can you tell – I’m on a passionate financial responsibility soapbox! In our early years of marriage, my husband and I experienced financial problems because we lived beyond our means – we didn’t know any better until it was too late. I don’t ever, ever want to go there again. Even more so, I don’t ever, ever, ever want my grandchildren to experience the turmoil, pain and stress of debt simply because they didn’t learn how to save until they could pay cash for something or learn the freedom of living within a budget.

Last year my granddaughter did the “consumer math” course by Math-U-See’s Steve Demme, called Stewardship. It was a good course, giving a good overview of how often math is used in everyday life scenarios. Additionally, it included a daily devotional, covering related biblical principles. She learned a lot and it’s a course I can recommend.

Having said that, this year we’re doing our own thing – I do a lot of that – and will call it “Personal Finances” or something like that.

You may be wondering why I find it necessary to do “Personal Finances” this year, since we did the Stewardship course last year. Why are we not doing something more advanced like Calculus?  Three reasons:

1. My granddaughter’s plans, post high school graduation, don’t require higher level math. If something changes, she can learn what she needs if/when she needs it. (Because, in homeschool, she’s learning how to learn )
2. I was convinced and convicted that she needed more – more real-life, hands-on financial learning experiences.
3. Learning to handle her money wisely according to God’s principles, at this age, is something she will benefit from everyday of her life. Not only will she be free from the suffering debt can bring, but if she grasps and applies these basic financial concepts, she will know peace and contentment, living and enjoying life within her means. She will do well in life.

Next up: I will tell you exactly what our Personal Finance course looks like as God continues to shape it. Oh yes, did I mention that He has decided all 5 of us have things to learn so it has become a family course! But isn’t that what home education is all about!

References:

(1) JumpStart Coalition
(2) Young Americans: Center for Financial Education

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