Why don't we teach personal finance in high school? When I was 17 I learned about double shifts in the supply and demand curve in AP Economics before I was formally taught the difference between a stock and a bond. I learned how to mathematically determine how a business should set its price points based on consumption patterns before I knew how to balance a check book. Do you see where I'm going with this? I truly believe that teaching personal finance to children and teenagers could have positive, long-term effects to both the economy and the general population. Perhaps some of the crippling financial errors people make (such as buying homes they can't afford) can be avoided in the future with some simple education.

Student loans are one of the issues that inspired this post for me. My clients and readers know that I consider student loans to be one of the most dangerous and misunderstood financial tools out there. High school kids often don't have parents who fully understand the lending terms of these loans either but tell their kids 'its an investment in your future.' Gosh the colleges love to hear that! The desire of kids to attend their 'dream school' is a dangerous one if it forces you to borrow your way through life Teenagers should learn about the financial aid process in high school. Chapters 12 and 13 of my book go over some of the many avenues which offer free money to college students through grants and scholarship. Many of these opportunities aren't well enough publicized and could be through school programming.

If my vision of a financial literacy class ever comes to light, responsible usage of credit cards would undoubtedly be in the curriculum. Money spent on credit cards is real and students often don't understand that or just don't care. If going away to college is a student's first opportunity to act responsibly with credit or pay the consequences, credit cards can teach you an unfortunate lesson. I've seen it in my practice with young clients who relied on credit cards to maintain their lifestyle during their last few years in school. Graduating into an economy like this is tough enough; doing it while racking up fees and penalties on a credit card is just not necessary. Credit cards should be used with kids starting at 14 or 15 and they should understand the positive affects of building strong credit at a young age.

The issue of financial literacy affects younger children as well. Most of us have been discussing the financial crisis and the recession with our families and co-workers over the past few months. We leave children out of it because we generally consider it to be 'over their heads' or inappropriate to discuss money issues with 4th and 5th graders. That may be true in some cases, but I think keeping a child's understanding of money to a simple allowance really isn't going far enough. Just like filling out a scorecard at a baseball game can be a hobby for kids, so can tracking stocks and market indexes-even without the usage of real money. The hypothetical scenarios we deal with in business school about how executives come to make important business decisions can apply to children as well. We just need to create analogies which kids can understand, perhaps using playtime, lunch money, and toys as examples.

It seems to me that we're entering a proactive era, whether it be making the world a greener place for future generations or raising our moral expectations from publicly traded firms. Why not raise the bar with our kids as well? The world has become increasingly financially complex over the past decade, so much so that many adults haven't a clue about their overall financial picture. The least we can do is raise our standards to the point where kids graduating into this wild world can keep their heads above water!

Russell Bailyn