by Devrie Paradowski

Created on: August 28, 2010

A real-world economics class that simulates financial life from high school graduation to retirement in the course of one academic school year would be a powerful course for pre-college kids. Unfortunately, schools do not do that.  Economics classes in high school consist of balancing check books, learning about the stock market, and understanding the socio-economic environment of many societies.  Parents must make a real-world approach toward teaching children about the debt-trap by blending social-studies, economics, and personal financial management into a hands-on educational format for their children.

Gross National Happiness

Children learn about gross domestic product, and other factors that effect the national economy in school.  As a parent, you have to tie personal financial responsibility to what your child is learning in school so that he can make satisfying decisions as a money-earning adult.  Consumerism is a by-product of the free-market.  You can expose your child to the various means that companies are vying for his money through advertisements, social media, and social peer pressure.  You child must learn to be satisfied with what he has before he can learn to avoid debt traps associated with consumerism, and that can be a very difficult concept to teach.

It's great to be able to buy what you want, but there's more to being able to buy what you want then whether or not you are able to afford it. What determines someones ability to afford something?  Will your child understand that simply having a $75,000 a year job does not mean he can afford to buy a luxury car and a fancy home?  Before venturing into all the long-term expenses of life and learning about the importance of savings, he needs to understand that a high income does not necessitate buying super nice things.  He should learn to be happy with what he has so that he can learn to postpone purchases int he future.

Long Term Expenses

Why are so many politicians debating the future state of Social Security?  That question is a powerful one to present to your child.  Expendable income may depend deeply on how much money he has to save for his retirement.  How much money will he need to survive after age 65?  Ask him what he thinks he'll be able to do at that age.  What type of income does he want to have, and see if your child can come up with a savings estimate for that retirement figure.  Schools and parents

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