Can credit union really teach students money lessons?

Subsequent to my post on 16 Feb 2007, “Students learn personal finance from school-based credit union“, the author at has some doubts on whether credit union can really educate high school children on financial lessons.

I am a big proponent for teaching the younger generation about money as early as possible. But still, I couldn’t help but wonder, will the credit union branch really teach the high school students their most necessary money lessons?
I think the main problem is that banks and credit unions teach you lessons about managing your own money. In today’s world where credit comes knocking on your door, this is no longer enough. It is more important to teach the younger generation how to handle money, that is not their own. We need to make sure the younger generation understands the implications of borrowing and living life large from their credit cards. We need to make sure that when the young adults move out of the house, from the constant guidance of their parents, they are capable of distinguishing between “income” and “credit”.

The author instead advocate that financial lessons should be taught at home by the parents insead.  It is the author’s belief that parents should do their part to impart financial knowledge such as the use of credit card to their children while they are young, so that the children would be equipped on when to use credit (or what Robert Kiyosaki mentioned as good debt) when they moved out on their own. 

So, while in no doubt opening credit union branches in the schools is a good first step, measures beyond these which provide a healthy understanding of credit are needed as well. The best place to probably teach these lessons is home. Parents can start teaching their children the inner workings of a credit cards, by adding their children as additional users on one of their cards, before the children move out of the house. By making the children pay their statements each month in full using their allowance, they can educate them that credit is not “free money” and comes with strings attached. Also, by making sure that the card is paid off in full each month, the good habits of managing credit cards correctly can be ingrained in them right from young age.

Seriously though, parents should make sure that the children know from a relatively young age (high school?) that the power of credit is a double edged sword; if harnessed well, it can bring life long freedom and flexibility, and if misused, it can bury you to the eyeballs in misery. They should make sure that the children know when and how to wield this double edged sword. Because, once they are out of the house and on their own, they will be courted and crooned by credit card companies on every corner they turn.

They only have what they have already learnt to rely on, to save them from an abyss of bad financial decisions. As one of the ads on TV says “Talk to them. A part of them will always listen to their mother”.

While I am not against the idea that finanical lessons can be taught at home by the parents, I do not see that it is the only and best way.  The issue I see is that those children who already has very little financial knowledge, their parents are likely to be have low financial literacy as well.  Parents are likely to educate their children based on their own experiences.  How the parents are going to teach their children about the pros and cons of using credit card if they themselves are already deep into credit card debts.

Take Robert Kiyosaki and his “Rich Dad” and “Poor Dad” as an example. His natural dad, “Poor Dad”, does not have the adequate financial knowledge, and Robert Kiyosaki was fortunate that he has his “Rich Dad” to teach him financial lessons.  However, not all us can and will have a “Rich dad” like Robert Kiyosaki has. 

Therefore, there is no one best way of how financial knowledge could be taught.  It takes all available means whether it is through the parents, or through the education system or even programs from credit unions.  If you have a “Rich Dad” like Robert Kiyosaki, then good for you.  If not, you would have to find other available means to acquire your financial knowledge, if you want to be as wealthy as Robert Kiyosaki.