Personal Financial Planning

Personal financial planning should be a requirement in high school curriculums

Just a few decades ago, personal financial planning was something only geeks and wealthy people did. Today, everyone knows it's a necessary skill we should all acquire. Most of the major television networks now have some kind of regular programming devoted to the subject of our money and individual financial planning. These segments are educational, but a great many baby boomers are sorely lacking in an effective personal financial program that will cover them in old age. So now they're playing catch-up, trying to mend those years of neglect. This being the case, it makes sense that our kids should be exposed to the basics of personal financial planning while they're still in high school, so they don't go down that same road.

When you're young, retirement is the last thing on your mind. Reaching that stage of life may as well be generations away in young people's mind. Yet, that day will come. If financial planning were a required course in high school, at least the concepts will make more sense. Doubtless, the modalities will change in their lifetime, but imparting a basic understanding of the current Roth-IRAS, 401K plans and mutual fund portfolios will convey the concept and benefits of these investment models.

Such a course might present case studies which show the results of various avenues of personal financial planning begun at various points in life. For example, three case studies based on persons making identical incomes, but implemented at the age of 30, 40 and 50 could be eye-opening lessons. Other case studies might examine the results of weighting the percentages of income invested in a balance of investment vehicles.

Other topics might include the Dow Theory and historical trends of the stock market, what day trading is and how successful such investors fare statistically. The idea would not be to make the students experts in personal financial planning, but to make them aware that making such a plan will impact their resources in a significant way. Who knows that Social Security benefits will even be an option for these young people, come retirement.

In addition to these more complex areas of study, students could learn more about the everyday issues they'll soon face in the real world. For example, these kids will eventually purchase their own vehicle. There are lots of ways to approach purchasing a car. A lesson could show the financial outcomes of saving and paying cash versus financing and paying interest. How about financing a college education? Some recent college grads will be paying off those loans for many years. This information should not serve to discourage the college bound student, but to encourage the examination of options. Grants, scholarships and two-year stints at junior colleges can make a huge difference in their financial situation after graduation.

Perhaps some clever educator should suggest a pilot program on personal financial planning in their school. This success might spread!

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