Why a Financial Literacy Youth Program?

The cost of financial illiteracy is huge. How do we know this? Hardly a week goes by that there is not an article in the media about the historically high debt levels of the average family. Not only is this disconcerting, more concerning is that this debt is consumer debt.

This is hardly surprising in a day and age wherein high school and college students have credit cards thrust upon them, that we have consumer debt that is spiralling out of control. What chance does an ill prepared teenager or young adult have against the massive marketing machines rolled out by advertisers, institutions and lenders when we as a society have ill prepared these young minds for the world they are about to encounter.

Since early childhood watching Television their minds have been literally programmed to be consumers and when the opportunity to buy things with perceived free money comes along it is little wonder that they embark on a spending spree that leaves them debt ridden, possibly for the rest of their lives. This debt may never be repaid no matter how good the intention of the borrower to repay is. Over a lifetime that cost is enormous and often crippling.

Little do they realize the impact of not paying on time or missing a payment has on their credit rating until they embark on the need for borrowing for a car. Worse yet being forced into bankruptcy early in life could lead to not getting the home they have always dreamed of. Never mind the stigma that may come with financial ruin.

Who teaches them about the time value of money and compound interest that can either advance you financially or can be a terminal cancer to your financial well being?

Everyone knows the price of poverty, if one experiences a lack of financial resources; no breakfast due to lack of money leads to poor attention spans for the student potentially resulting in less than stellar grades.

Being dressed differently due to lack, than your peers leads to self esteem issues and the pathway to a host of ails like depression; mental illness lurks just around the corner and possibly suicide as these pre-adults see no way out.

But what if during the course of their high school education they were taught how money is made, how to spend wisely, how to save and how to invest, would this yield a different result?

What if we taught them what is involved with a credit card and how interest is applied on interest on ever increasing interest rates and balances?

Many of the largest purchases we will ever make include some sort of borrowing. Your car, your furniture, a home and so forth all may include a loan or mortgage attached to the purchase. The impact of a small percentage difference in interest rates is large in terms of savings or cost on these items. What if we taught them the real cost of borrowing and the difference in interest paid when they shop for financing?

What if they had financially literacy that included some exposure as to how money is actually made and the different avenues to wealth creation? What saving looks like and how to save? What is involved in a budget?

Why wait to educate our children about investing, or what a TFSA is, or a bond, or a stock are?

Often we hear that the millennial children may not have the same opportunities the previous generation has had for financial abundance. However, what if they felt optimistic about their plight in the financial world because they can see a path through financial awareness which will open opportunities that their parent(s) may never had or were not able to pass onto them.

We believe the more people talk about financial illiteracy the more awareness will be created and the greater the focus to provide all encompassing financial literacy education.

Thank you for reading this view point and please feel free to share it with others.