Newspaper article St Louis Post-Dispatch (MO)

Early Financial Education Can Help Promote Economic Stability

Newspaper article St Louis Post-Dispatch (MO)

Early Financial Education Can Help Promote Economic Stability

Article excerpt

April is Financial Literacy Month, so it's a good time to discuss why it is important to teach children about economics and personal finance.

The bistate region earned high marks in a 2015 study by the Center for Financial Literacy. Missouri earned an A for its requirement that high school students take either a half-year course in personal finance or a half-year of personal finance instruction in another social studies or practical arts course.

Illinois earned a B for its requirement that high school students take a nine-week consumer education course, which includes 30 to 38 hours of personal finance.

But research shows that high school may be too late to teach important economic concepts. Most children form financial habits by age 7, according to research by David Whitebread and Sue Bingham of the University of Cambridge in England.

Children learn what they know about the economy and personal finance by observing the world around them and watching how adults behave in that world. In this high-tech age, children often see their parents and other adults making purchases online or in stores with credit cards or smartphones. Cash and checks are used less frequently, which can lead young children to draw incorrect conclusions about money and income.

One way to help head off these misperceptions is for families to embrace financial literacy for their children at a young age.

That's why the economic education department of the Federal Reserve Bank of St. Louis recently created Q&As for parents to use when reading popular books with their toddlers through their tweens. These resources are free at stlouisfed.org/education/parent- resources. So far, Q&As have been created for 20 books, and more will be added soon.

It's a simple but powerful idea. These free, online sets of questions and answers accompany well-known books that happen to have an economic slant. I've read some of these books with my children and my grandchildren.

With younger children, parents can read books such as "Little Critter: Just Saving My Money" and "Alexander, Who Used to Be Rich Last Sunday" and then use the Q&As to talk about financial and economic topics. …

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