Everyone wants their kids to be happy and successful.
Teaching them about personal finance and economics can help make that happen.
In fact, the lack of that education can be devastating. It can lead to credit card and student loan debt, living paycheck to paycheck and not saving enough for retirement.
There has been a push in recent years to bring finance and economics classes to students across the U.S. While the nation celebrates Financial Literacy Month in April, there was no official month dedicated to celebrating economic education — until now. This October marks the first-ever National Economic Education Month.
“People have stopped paying attention,” said Nan Morrison, president and CEO of the Council for Economic Education and a member of the CNBC Invest in You Financial Wellness Council. “There’s always something going on that deserves a look through the lens of economics.”
CNBC spoke with Morrison about the importance of an economics education and what parents can do to help their kids learn the basics. Our conversation has been edited and condensed for clarity.
Michelle Fox: What do economic classes teach students?
Nan Morrison: Economics teaches you how the world works. It’s kind of the macro view, how things interact with each other.
Why do people get worried about the stock market going down, when the chairman of the Federal Reserve says he might start to raise interest rates? Because that may affect your investing philosophy, if you’re fortunate enough to have some investments. It might affect what kind of government funding is becoming available if you’re thinking about going into certain jobs or careers. It affects the job outlook.
MF: Where do American students stand right now with an economics education?
NM: Only 25 states require economics to be taken as a course. That’s kind of sad.
Every time I tell somebody what I do, they say, “Wow, I wish I’d had more economics in high school, it would really help as an adult.”
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I’m a big proponent of making sure that every kid can count and read. Because without that, you’re no place. But if we don’t teach them about the context in which they’re making decisions, which is what economics helps them to do, and give them the skills to understand trade-offs and choices, which is what economics helps you to do, then I think we’re really falling short.
MF: How can economics coursework help close the wealth gap?
NM: I don’t think there’s a straight line on this. However, one of the big places I think where economics and personal finance come together is college and career decisions. There are actually a lot of complex choices to make around that. What are my goals? What are the different paths to achieve those? How do I make those decisions? That’s where the decision-making skills of economics and the knowledge and vocabulary of personal finance really come together for a lot of families.
With this education, with these decision-making skills, hopefully you can make a really good decision and informed decision about what’s next after high school. That might mean a job that has benefits, like a 401(k) plan. Now, the difference between having an hourly job and a job where you can put away some of your income tax-free and potentially get it matched by your company, that starts creating a much steeper trajectory toward wealth building for our nation’s children.
MF: What can parents do to help their children learn about economics?
NM: Read the paper with your kids. Having that conversation with your children is important. They care. They want to hear about these things.
You can encourage your kids to look up answers for things. So go see what an economist has to say about this. If you Google something like “what do economists say about the wealth gap, or infrastructure spending?” you will find a lot of things.
Try to have the conversation at home, even if it’s not perfect. It doesn’t really matter. Just introducing your children to the vocabulary, just so they start hearing the words, takes away the fear, takes away the mystery.
Also, schools listen to parents. So go to your school and say, “What do we have to do to get this class or at least some modules, into the high school? What would that take?”
Not every parent or guardian has that time. But if you are in a position where you can do that, or you can enlist other parents to help you, there’s nothing like showing up in front of the principal and saying, “You know, this ought to be added into the curriculum, and here’s why.”
Register for a special town hall with U.S. Secretary of Education Miguel Cardona on Wednesday, Oct.13.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.
