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Author: Don Obrien

Letter: Learning basic finance concepts can start as early as first grade


In “Global expert Lusardi shows importance of learning now to benefit later” (Financial Literacy and Inclusion Campaign, Report, October 7) Professor Annamaria Lusardi is right to concentrate on expanding financial education in schools, and the earlier it starts the better.

Introducing financial concepts and reasoning can begin as early as the first grade or Year 2 in England — the first school year after kindergarten.

This was my experience more than 65 years ago. Every student had to have a bank account that was co-ordinated by the school with parents. On Mondays students’ bank passbooks were distributed by the teacher, and students were requested to verify that the last week’s deposit was accurately recorded — we were learning “addition and subtraction” that year.

Students were then given a deposit form for the next deposit that would be collected in class on Wednesdays.

Our homework — we were also learning to write in that grade — included (correctly) completing the form that would be vetted by a parent, and ensuring that the amount entered for the next deposit reflected the actual amount of money provided by parents for the upcoming deposit. Initially, I don’t believe that the weekly deposits ever exceeded 50 cents, except for birthday gifts or the occasional monetary reward for a “lost” baby tooth!

By the third grade we were already verifying the banks’ interest payments, since by then we were exposed to “multiplication”, and by the fifth or sixth grade, to the concept of “compounding” — that is, exponents.

Even if this exercise is carried out online, could this work in today’s world? Probably not. Even if banks would be willing to subsidise this programme in today’s zero interest rate environment, if parents are resisting mandatory vaccinations and/or masks to prevent the spread of Covid-19 in schools, it is unlikely they would agree to mandatory bank accounts for their children.

That said, I wish Prof Lusardi luck with her campaign to improve financial literacy, which can’t come soon enough.

Ira Sohn
Emeritus Professor of Economics and Finance, Montclair State University
Upper Montclair, NJ, US



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