Robert A. Bonavito, CPA PC

Framework for Teaching Financial Planning in High School

My name's Robert Bonavito, New Jersey forensic accountant. This video is part of a series of videos where I discuss forensic accounting topics for educational purposes only.
What someone does with their finances is so important and so critical and overlooked by many, many people, and it's kind of a pet peeve of mine because I think that we don't really pay enough attention to teaching people to understand finances. And the way I look at it is I think that teaching kids financial planning should be similar to what we do when we teach them to drive. First of all, you know, the kids are in the car with the parents for many, many years driving and they watch the parents drive, and then when you're 15 or 16, what do we do? We put 'em in a driver's education class, they take a test. After the test we give them a provisional license, they have to go with a professional driver for 10 to 15 hours who actually teaches 'em how to drive as a professional, and then we let them drive on their own with restrictions, they'd have to drive with the parent, we'd let 'em do that for a year, and after that year, they take a driver's test and if they pass that, we give them a driving...a provisional license for two years and they're monitored for two years. If they get in a lot of accidents, they have to go back to school. And then finally after two years, they get a regular license. 
Now what I'm saying is financial planning is pretty important. Driving is very important, too. Learning how to drive, let's face it, it's life and death. But financial planning can also affect your life, and I think what we need to do is have a similar type financial planning course in high schools. And what I would say is, you know, parents should discuss this with their kids throughout their life so they understand how things work, and then at some point when they're 15 or 16, they would take a course, they'd have to pass the course, and after they pass the course, we'd actually give them a back account, an investment account, a credit card, a small loan, and there would...a professional would go over how to set these up, would go over how to use 'em, and then they would use those accounts for one year. We'd make sure they made the payments, we'd make sure they use their credit card, we'd make sure that they invested in the stock market, maybe a little retirement account. 
Lots of people, lots of financial companies would love to get involved in this, and it would be great for the kid. And then you could see if they had some kind of issues or problems, and if they didn't after one year, just like with a driver, we'd give them a test. We'd go back and evaluate how they did. And if they did good, they would get a provisional license where they would get a real bank account, a real savings account, a real stock. And then they would have a two-year window to use that, maybe a student loan or something like that. But most people don't learn...I mean, I'd learn by reading and applying, and I think most people learn some function, either they read and go to lectures, but applying it and actually using it and feeling it is the way most kids learn. And that's the only way I found that kids learn financial planning, is put 'em in a stock investment, see what they do, let 'em lose money, make money, and see it go up and down, and they get all excited. And if it's real money, it's important too. You know, that helps. And I think that if we did this for kids, we wouldn't have so many issues in...when they reach retirement age or they got older because they would understand how to to buy stocks, how to sell stocks, how to use credit cards, how to use loans. These things aren't good or bad, it depends on what you use 'em for. So anyway, if you have any questions or comments on this topic, feel free to give me an email.

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