While talking about money isn't necessarily considered polite dinner conversation, the topic should always be on the table as parents and educators prepare children for adulthood.
Several financial institutions recognize the importance of raising financially literate children and have begun offering grants to schools for implementing money management courses.
One such program, Discover's Pathway to Financial Success, has planned to give $10 million over five years to help teachers - and Matthew Towson, senior manager for media relations and community affairs, says they are hungry for applicants.
Many teachers see the importance of financial education, but don't feel qualified to teach it. By applying for and receiving a grant from Pathway, they'll receive a curriculum, teacher training and technology materials.
In addition, parents need to step up and advocate for financial education as well, he says.
"Research shows parents are not comfortable or feel awkward talking to their children about finances. In fact, they are more comfortable talking about sex and drugs than money," Towson says. "We need parents to get comfortable talking to their kids about money, and we need them to be advocates for financial education in our schools."
He adds that Pathway has resources to help parents encourage their local schools to apply for grants.
Here, Matthew tells us more about the program and offers advice to parents and educators alike about having "the talk" with their kids.
What is Pathway to Financial Success? Why was the program founded?
Pathway to Financial Success is a five-year, $10 million investment in financial education Discover has made to ensure that students get the information they need to manage money and achieve brighter financial futures. Through Pathway, the company provides grants to schools to cover the cost of implementing a personal finance course, giving them access to standards-based curriculum developed by several financial literacy organizations and offering teachers the training they need to deliver it. Pathway to Financial Success is well on its way to reaching more than a half million students as we work to get financial education into classrooms across the country.
How does the program work?
Discover offers grants to public high schools that implement measurable financial education curriculum. This curriculum needs to be substantial, and results must be measurable. Grant information and applications are available on the PathwayToFinancialSuccess.org website. Our website also offers resources and sample lesson plans for teachers, parents and students.
What are some financial basics every kid should know by the time they graduate from high school?
By the time a student graduates high school, they should know the basics on how to balance a budget, how compound interest works, opportunity costs, the basics of investing, interest rates on loans and how long it may take to pay off a student or car loan and eventually a mortgage. These are just some of the many subjects financial education should cover in high school and even middle or elementary school.
When should parents start talking to their kids about money?
As early as possible. While Discover's Pathway to Financial Success program targets public high school, we are supportive of K-12 financial education and parents can and need to play a critical role of teaching their kids about money at the earliest stages in life through the time they graduate college.
What are some real-world ways parents and teachers can teach financial literary to children?
One way is to open up a savings account for your child, give them an allowance and teach them how to earn and save their money. If there is an item they want to purchase, teach them opportunity cost of need vs. want and how long it will take them to save before they can purchase the item they want.
Can you share some stories you've heard from program participants as far as really inspiring and exciting kids about learning how to manage money? What are some of the most innovative educational techniques you've come across?
I'd actually like to refer you to an article from USA Today last November that featured one of our grant recipients, South Garrett High School in Maryland and Lisa Bender, who teaches personal finance. Here is a little excerpt:
"Stepping in to provide funding are banks and private businesses, pledging millions toward financial education. Discover's Pathway to Financial Success grant program will donate $10 million over five years to high schools to start or expand financial curriculum. PwC, the U.S. branch of PricewaterhouseCoopers, is launching its Earn Your Future campaign last year with a $60 million pledge, plus $100 million worth of volunteer hours, to youth financial education.
Bender is a recipient of the grant program. Garrett County got $41,000, which it used largely to buy iPads that students use in class.
Bender, who has been teaching business for 27 years, was the school's biggest advocate for requiring financial literacy education. She was inspired by the impact of a stock market unit she taught in her economics class each year.
'It was making a difference to those 20 kids but there were 800 more kids in my school,' she says. 'What if we could reach all of them?'
Now she does. While they may not be thinking about how to take out a mortgage or get a credit card yet, they're leaving her class with an understanding of the pertinence of their financial literacy.
'Everything in here is real-life applicable,' junior Ben Reichard says of the class. 'At first I was like, man, another requirement. But in the end, it was definitely worth it.'"
What are some of your favorite tools or resources for teaching kids about money (aside from your site, of course)?
There is not one specific recommendation we have for teaching kids about money, but we believe we have a lot of useful tools on our website to help. The most important thing we believe parents should be doing is having a conversation with their children about money and contacting their children's schools and making sure financial education is being taught in the classroom.
How much should kids be involved with saving for a college education? What can parents do to coach kids on the importance of saving and to help them save and/or find money for college?
We encourage teenagers to talk with their high school guidance counselors and explore all options available for paying for college including student loans, scholarships, grants, etc. Whether parents can afford to pay for their child's college education or not, parents, teachers and high school guidance counselors should be teaching children the real costs of attending college, how student loans may affect their buying power later in life and how important it is to have a budget in place when/if you attend college.