Teach financial literacy, Trustee says

“Far too many Canadians rely on credit,” he said. “The reason that we’re in this economic crisis right now is that many North Americans and people around the world didn’t have the economic literacy that they needed to understand how to use credit cards properly or how to read the details in mortgage contracts.”

Teach financial literacy, trustee says

Crisis Of Ignorance

Dave Bowden, National Post Published: Tuesday, April 07, 2009

A trustee who wants financial literacy added to the elementary school curriculum says the present economic crisis could in part have been avoided if schools provided a basic understanding of how the economy works.

Too few people understand the forces at work in an economy that has nearly gone bust, contends Toronto District School Board trustee Josh Matlow, who blames schools’ failure to provide a better understanding of the economy for a population whose increased debt load is evidence of its economic ignorance.

“Far too many Canadians rely on credit,” he said. “The reason that we’re in this economic crisis right now is that many North Americans and people around the world didn’t have the economic literacy that they needed to understand how to use credit cards properly or how to read the details in mortgage contracts.”

The average debt owed by Canadian households rose to more than $90,000 last year and personal bankruptcy spiked by 22% in January over last year’s rate.

Mr. Matlow hopes to spare future generations from what he sees as self-inflicted wounds by providing them with the basic principles necessary to manage their own finances.

Tonight at a school board committee meeting, he will propose adding elements of economic literacy to the curriculum, starting as early as Grade 4.

“We teach kids how to read and write. We teach them how to add and subtract. But unfortunately many students only learn about how to use a credit card when they go to university, and they learn from the credit card companies themselves,” he said.

Though far from a new idea, advocates of economic education have increased in number with the recent onset of a financial crisis that federal Finance Minister Jim Flaherty last month called the “gravest threat” to the global economy in 60 years.

The 2009 federal budget promised $5-million over two years to create a task force on promoting financial literacy.

The New York-based not-for-profit Council for Economic Education began 60 years ago when a group of leading industrialists noticed an influx of under-educated GIs returning from war and starting careers and families, but lacking a fundamental grasp on the postwar economy developing around them.

Today, council president Robert F. Duvall says teachers must instill economic literacy at a young age to predispose students to the types of financial decisions they will make in adulthood.

“We know that economic and financial literacy is not something we’re born with; it’s learned behaviour,” he said.

“You’re either going to learn it in school from well-prepared teachers … or you’re going to learn it the hard way out there in the world of experience.

“What we’re seeing all around of us is the effect of financial illiteracy.”

dbowden@canwest.com

http://www.nationalpost.com/news/canada/story.html?id=1471088

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