Monday, August 1, 2011

Massachusetts Tackles Financial Literacy

The state of Massachusetts is the latest to tackle financial literacy legislation. In supporting the bill, the Metro West Daily News makes a convincing case that holds for the Commonwealth and every other state.

Some students will borrow money to buy a car while still in high school. They need to know what interest is, and how to calculate how much interest payments will add to the sticker price. As soon as they hit college, they will be deluged with credit card offers many won't know how to weigh. Most will end up borrowing money for college - the average student graduates owing $20,000 - and many will be surprised when the bill comes due.

Later, they may be expected to manage their retirement accounts, but few will have been taught anything about investment strategies. They will have to make decisions on insurance and mortgages - and we've seen in recent years how easy it is for people to make poor decisions when buying homes.

That's why it is long past time Massachusetts incorporated financial literacy into the public school curriculum. We do no service to our children by sending them out into the world knowing all about geometry and history, but nothing about how to balance a checkbook.

Kudos to the Commonwealth for taking this step. It's too late for the 2011-2012 school year, but here's hoping the 2013 curriculm includes topics like interest, debt and savings.