Save the pennies

My friend, Abby, and I have said for years that there should be some sort of basic money management course that is mandatory for all high schoolers (or even junior highers, for that matter). The basic principle is that few people know the basic principles of saving, of not spending more than you earn, or how credit works.

Forget home-economics, let's talk personal economics. With a little basic education, perhaps our country could have avoided the mortgage and credit situation we now find ourselves in. While yes, you could argue that banks may have taken advantage of situations and people, I also think we are partly to blame. If we would have exercised prudence and some basic principles of spending, perhaps things would have been a little different than they are today.

These classes may sound simple, but they are important in setting the foundation for financial education. Basic topics like: "How to properly use a credit card (ie, a credit card is not a free loan)" and "The latte effect: don't buy that $5 coffee drink if you don't have $5" and "Let's talk about saving: some simple definitions" may be some of the most important classes high schoolers ever take. After all, when was the last time you used a cosine? But I bet you more recently needed a cosigner.

And while our banks may have good intentions to help us save, I think they are missing the boat in helping to change our attitudes. Take Wachovia's "Way to Save" or Bank of America's "Save the Change." These programs, in essence, help you save money every time you use your debit card. For each purchase you make, money from your checking account is automatically transferred to your savings account.

The issue here is that we are propogating the underlying problem in our personal economic culture. I thought you saved money by not spending it. Instead, these banks are saying that the best way to save money is to spend it. Not quite the right message in these economic times.

So we need a revolution. An economic revolution on the most microcosmic scale. And I think it starts when most of us start our first jobs and are beginning to become responsible for ourselves. Mandatory classes in high school might be a good idea. After all, how can our future leaders be responsible for our country's finances when they can't even handle their own?