Should Canada teach financial literacy earlier in schools?
There are exactly two finance-related things I remember from my elementary and high school education.
The first: in about grade two or three or so, we learned how to write a cheque – you know, scribble the amount out long-hand and then draw the little line to the end of the space so no one can scam you. The second: in grade 12 economics, I was taught the definition for opportunity cost, which can be described as measuring the gains of one choice versus the losses levied by that same decision.
That’s pretty much it. The point, aside from me not exactly being a Rhodes Scholar? Financial literacy could get started a lot earlier for Canadians. And one Canuck task force certainly agrees.
At the behest of the federal Task Force on Financial Literacy (TFFL), an age-old policy debate has surfaced again this month. At the heart of the discussion lies the important question of when it’s best to start teaching kids about fiscal responsibility.
The idea sounds daunting, no doubt. No teen wants to learn about yields and derivatives in between gym class or even recess, but the TFFL – led by some pretty important finance people – feels that misses the point. It’s the basic stuff they want covered earlier in school: the consequences of a mortgage; the benefits of an RRSP; how to plan for retirement. Those are the fundamental building blocks of money management they feel are missing.
Certainly, at no other time in Canada’s history has it been so clear the financial irresponsibility of some doesn’t just affect them. Many people blame the recession on the misspending of a few, and the task force, run by big shots like Minister of Finance Jim Flaherty and Sun Life Financial CEO Donald Stewart, notes that Canadian household debt has reached alarming figures.
According to released data, in partnership with Social and Enterprise Development Innovations, the average household debt is at a record high of $1.48 for every $1 of disposable income, surpassing that of Americans for the first time in a dozen years.
Six in 10 Canadians would be “at risk” if their paycheques were delayed by even a week, the organization added.
You can’t pigeonhole these problems to one factor – some would blame wage increases not being in line with the cost of living, for example – but it may be clear that what Canadians don’t know about their money might be sinking them. And, depending on how you believe the finances of one can affect the finances of all, perhaps the rest of the country, too.
What do you think? Do Canadian schools need to teach financial literacy earlier in curriculums? If so, what basic tools would you like to see kids learn?
By Jason Buckland, MSN Money