An Accounting Moment

If you were to ask any of my kids about their training in economics, they would likely laugh and politely respond that their mom is a CPA, and that they are well-trained. To all CPAs everywhere, I would like to apologize for tarnishing the title, at least to my children.

The truth is that their training began at a very early age (about 5 years old, which I still believe is a good time to start), and progressed so that they were responsible for buying their own clothing by age 8, balancing their own checkbooks (and entering the data into a computer finance program) by age 12, running their personal budgets thereafter, setting up IRA accounts the moment they had earned income, and stepping into the dangerous waters of credit card use at 18. I was over their shoulder (or breathing down their neck, depending on your point of view) the entire time, teaching, repeating, cajoling and enticing, all with the end view of helping them leave my nest with some good solid principles in areas of finance.

That's why I solidly support the theme of today's AZ Republic article on the topic:

While other high school students spent their summer vacation sleeping in late and lounging around a swimming pool, Carlos Soto and Hawk Kitcheyan were up early and heading to work at Merrill Lynch.

The soon-to-be seniors at Central High School in Phoenix will finish a six-week internship at the financial brokerage's Phoenix headquarters today. Soto and Kitcheyan represent a nationwide push to improve financial literacy among young people. Educators and policymakers point to increased consumer spending and Americans' negative savings rate as reasons students need to learn about economics and personal finance at a younger age.

Some states, including Arizona, have debated making these subjects graduation requirements.

The amount of total U.S. consumer credit grew about $4.4 billion in May to a record $2.174 trillion, according to the Federal Reserve. At the same time, the national savings rate has dropped below zero.

"The facts are pretty obvious that people do not do a good job of managing their personal money," said Mike Sullivan, director of education for Take Charge America, a debt-counseling program in Phoenix, and president of the Arizona JumpStart Coalition for Personal Financial Literacy.

Read the rest of the article for some of the ways that these kids grew over the summer. The Gilbert schools have long had some classes that emphasized basic financial training, including the stock market game, and for that, I am grateful. And now some banks are beginning to see the merits of helping youngsters learn to manage their money. When I tried to open a checking account for my first daughter, no bank would allow it; their beginning date was age 16. I found a credit union that would open a checking account; but even that credit union won't let them have a credit card in their own name until age 18. When we went back-to-school clothes shopping, my girls were mortified at pulling out their checkbooks to pay for their clothes (on which they had added up all costs carefully in the dressing room); most clerks looked at and spoke only to me, even as the girls made the payments. So it would be helpful if institutions other than the schools were encouraging kids to have good financial habits.

One thing I've learned in my journey; not everyone can use the same method of budgeting successfully. In that way, my kids have taught me, as we came up with different ways of successfully managing their dollars. (Not everyone gets as thrilled as I do when a checkbook balances to the penny.)

Back to my apology. CPAs really are very helpful and kind; not all of them crack the whip over a Quicken program. It's an honorable profession.

Which reminds me; I still haven't taught them how to get their free credit reports online...