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Philanthropy, Money Curriculum, and Social Security

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Earlier this week, American Express published my second article for the company’s new community website, Currency. I used to think that philanthropy was an activity for the rich. Though anyone can donate a portion of income to charity regardless of their financial health, starting a foundation requires at least a million dollars. Some services offer similar benefits of a charitable foundation without the need for paying staff salaries or excessive administrative fees. Read about it here.

Also, on US News & World Report, I share 5 budgeting myths that prevent financial success.

Here are some more articles for your reading enjoyment.

Donna Freedman asks why physical education is mandatory in schools while personal finance education is not? Phys. ed. is required for a number of reasons:

  • to develop psychomotor skills
  • to encourage physical health, which is good for
    • society as a whole
    • building a strong national defense

It is in the country’s best interest to have a healthy and active populace. The same may not be true with financial responsibility. While saving money rather than spending recklessly may be a good plan for any individual person, it is sure to derail an economy on the larger scale. As we’ve seen with various personal economic stimuli over the past decade — in which the government sends its citizens checks or tax credits with the directive to spend, spend, spend — economists believe spending, even beyond your means, is how the economy expands.

While some may argue that saving money in a bank also expands the economy because banks lend out a multiple of every deposit they receive, that’s only true if banks approve loans and if the companies they lend to actually spend that money rather than using it to strengthen their balance sheet.

Furthermore, a full curriculum makes it difficult for schools to cover all the topics they should be covering without extending the school day or extending the school year. I’d like to see classes in personal finance management available as electives in middle school and high school, with some concepts of basic financial responsibility incorporated into other classes like home economics.

Lastly, Darwin’s Money takes a look at why there will be no cost of living adjustment for Social Security payments in 2011 and what this means for people relying on Social Security to pay their expenses. The CPI indicates cost of living has been steady and seniors have received bonuses recently, but real expenses may be increasing.

The Festival of Frugality included my recent article about the benefits of drawbacks of being an ambivalent person. For more articles about personal finance, check out the Yakezie list of personal finance blogs and

Updated February 6, 2012 and originally published October 17, 2010.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 6 comments… read them below or add one }

avatar 1 Anonymous

Thanks for the mention and congrats on your currency gig. Hope to see my content up there soon as well – neat site and they seem to be the first big financial trying to work with top PF bloggers and use social media to its fullest; wonder if others will follow suit.

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avatar 2 eric

I completely agree with Donna. PF should be a mandatory course along the likes of PE, health, and computer tech in high school. Too bad with the current state of the economy and the drastic cuts schools have had to make, this doesn’t seem like a plausible effort any time soon.

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avatar 3 Anonymous

It’s crazy that personal finance isn’t mandatory in school. I remember taking a class in high school, and it was just a waste. We learned how to balance a checkbook, and that was about it. I don’t think PE should ever be cut, but I definitely agree that the younger we can instill good pf habits the better.

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avatar 4 Donna Freedman

Thanks for the link, Flexo.
I respectfully disagree with regard to PF vs. PE. As an adult I have never played crab-ball, but I would have been well-served by knowing something about personal finance once I got out of school.
A whole lot of us were never given much (or any!) information at home. Had teachers talked to me about, say, compound interest, it could have made a big difference in the bottom line.
Back in my newspapering days (probably late 1990s), I interviewed a guy who taught a high-school PF class. He said kids came in not knowing that you have to pay interest on your credit card bills if you don’t zero them out. While researching the MSN article, I came across a study that said three-fourths of the teens surveyed didn’t understand credit card finance charges. (They also didn’t know whether using a check-cashing place was a good idea.)
Parents aren’t talking to their kids about money. Heck, some of THEM probably don’t understand credit-card finance charges, either.
We wouldn’t expect our kids to teach themselves how to read, write or cipher — but we release them into the world without any idea of how to fend for themselves financially.
P.S. I resented playing crab-ball as a teen. It’s a stupid game and it neither developed psychomotor skills nor encouraged physical health.

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avatar 5 Luke Landes

That’s interesting. I’ve never heard of crab-ball, but it certainly doesn’t sound fun. If PE failed you — and it failed me, too — I wouldn’t assume that required financial education courses would prepare students for financial responsibility any more that PE prepared you for a healthy lifestyle. Yes — young people do need to be getting the education from somewhere. They’re not getting it in homes where the parents aren’t good models. I worry about schools being the solution to every developmental problem when teachers seem to be getting a decreasing amount of respect at the same time. Sure, we can develop a certification program for teachers who wish to teach money management, but schools aren’t hiring more teachers and tensions between politicians and unions are high.

What do we remove from the curriculum so that students can take mandatory financial education classes? Is the purpose of a high school education to teach kids how to function in the real world, to develop critical thinking skills so they can teach themselves how to function in the real world, or to provide a training ground for college where they will learn critical thinking skills?

I’m all for personal finance lessons in school, but not at the required expense of anything else. Thinking back to my time in high school, my schedule was full of classes I was interested in, like history, English, music, foreign languages, calculus, etc. If I had been required to take a class in money management, it would have been a waste of my time, and there is a good portion of students for whom that would be the same.

As an arts advocate, I’d like to see all high school curricula include required music classes. The benefit of a musical education on the development of the brain (cognitive skills and motor skills are directly affected and there’s a correlation with mathematical and linguistic abilities) has been proven repeatedly, but it’ll never happen. The struggle with music is to keep schools from cutting back what already exists; in today’s environment, adding these programs is close to unthinkable. At least with personal finance, the topics can be covered in home economics.

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avatar 6 KNS Financial

I actually think that Personal Finance should be integrated into the curriculum much earlier than high school. You may not have to devote an entire class to it, but at least integrate it into other subjects when appropriate – math and history would be two easy ones.

In terms of destroying the economy with fiscal responsibility, this is only true if your economic growth is fueled mainly by debt! The process of deleveraging is what will stall this economy. However, if you take an economy where the average household and company isn’t leveraged up to their eyeballs, then a round of financial prudance won’t be as bad.

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