Feducation Essay

• Introduction
• Taking the Fed Challenge
• The Fed Enters the Classroom
• "A Tremendous Resource for Teachers"
• Never Too Young to Learn
• Working Economics into the Classroom
• Saving Our Future: Economics and Personal Finance
• For more information

 

Saving Our Future: Economics and Personal Finance

These new requirements are part of a growing trend among not just educators but community development experts, as well. Whether adults or children are the audience, educators are concerned about the lack of personal finance knowledge and skills, as evidenced by Americans’ low rate of saving and high rate of credit-card debt and bankruptcy.

The Federal Reserve has taken a leading role in the personal finance education campaign, sponsoring programs for both adults and students and taking part in events such as Teach Children to Save Day. “Personal finance is an application of economics,” Griffitts says. “You have to make choices, and every choice you make incurs a cost. Clearly, that is the foundation for making good personal financial decisions.”

Teaching children about saving money is taking on added urgency now given the mistakes adults have made, Suiter says, noting that the U.S. saving rate is now negative (with consumers spending $100.05 in 2005 for every $100 they made) for the first time since the Great Depression.

“You can’t change the world in one day with one lesson, but we want to draw attention to the need to save,” she says. “The negative saving rate is a wake-up call: We have to help kids realize the importance of saving.”

Ultimately, the key to successful economic education is to help students realize how it can improve not just the future of others, but their own economic outlook, says Pettit. Your next job, your career, fulfilling your lifelong dreams—all can revolve around the economic decisions you make.

“What we’re hoping is that they will be more aware of the choices they’re making and that life is a trade-off,” Pettit says. “I’m not saying you have to have money to be happy, but with any path you choose, it’s important to understand that you are making a choice and there is a cost. Economic education, done properly, makes that point.”

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