Youngsters need financial tutoring

With the recent volatility on Wall Street, those of us trying to survive on Main Street had better become more financially literate.

If the hallowed halls of banking and lending institutions can crumble, so can our respective personal financial frameworks. For the last two years, consumer spending has outpaced after-tax earnings, and we carry approximately $2.5 trillion in debt, excluding home mortgages. We can, and must, teach the next generation to do better.

When did you first learn what compound interest was? Did you understand mortgage rates and the different types of loans that were available before you bought your first house? Or are these concepts still a little cloudy for you to articulate even now? Are you a responsible steward of the economy, and will you teach your children to do the same?

Unfortunately, research indicates that only 43 percent of parents have discussed the importance of prioritizing needs and wants with their kids, and a surprising 42 percent of parents have not taken any steps whatsoever to discuss financial basics with their children (Capital One's 2006 Back to School Survey).

Many parents assume - incorrectly - that their children learn money management skills as part of their school's curriculum. In fact, fewer than half of U.S. states require even a basic economics course, much less personal financial literacy education.

In Texas, financial literacy education is a requirement, but additional funding is generally not provided. This means that it is even more critical for schools to work with organizations that can provide relevant financial literacy education for students.

Sound financial education and a solid grounding in fiscal responsibility are basic self-defense for all citizens - especially young people. An investment now in teaching America's youth how to earn, save and budget, how to manage credit, how to control their personal finances rather than vice versa will pay dividends in the long term.

Financially literate people are more likely to be self-supporting, to prepare for financial setbacks and emergencies and to increase their standard of living through wise spending, saving, planning and investing, according to the U.S. Financial Literacy and Education Commission. They also are less susceptible to scams and identity theft.

Financially literate citizens contribute positively to the local and national economy, improving peace of mind and national stability.

How can young people get this financial knowledge that they so desperately need? Fortunately, there are organizations that are answering the call to educate the next generation of consumers about how to effectively manage their money. Junior Achievement is one such organization, working closely with the business and education communities to deliver programs that teach K-12 students age-appropriate, hands-on lessons about how to be financially literate.

These students, possessing the necessary practical skills, will grow up to run our nation's businesses, government entities and educational institutions. Hopefully they will demonstrate more fiscal discipline than their predecessors in both their personal and professional lives, resulting in more robust communities and a stronger American economy.

I encourage businesses to support organizations such as Junior Achievement, which currently reaches more than 4 million K-12 students in the United States annually. The turmoil in our financial markets clearly demonstrates the need to take decisive action today. It's a sound investment in our children's futures.