What Congress can learn from a 12-year-old Money Smart kid

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Charlie Tiseo, 12, won an essay contest on smart finances. The ‘Money Smart Kid’ winner visits the Federal Reserve Bank of Chicago Money Museum with his mother, Elizabeth, and later talks with columnist Terry Savage on Wednesday, April 4, 2012. | Richard A. Chapman~Sun-Times

Charlie Tiseo is one money-smart kid. The 12-year-old sixth-grader at Still Middle School in Aurora won the essay competition with a piece entitled “The Curious Case of Benjamin Budget.”

In the essay, a take-off on the movie, he follows some wise advice: “Mind your budget, boy” – and grows wealthy as he ages.

Charles, who lives with his parents and two younger sisters in Naperville, is in the gifted program at his school. He gives particular credit to Junior Achievement for teaching him and his classmates about the economy and money. But lest you think he spends all his time studying, he’s quick to point out that he’s active in sports, plays the trombone in the band, and has earned many merit badges in Boy Scouts – including the “personal finance” merit badge!

But there’s something in the genes, as well. Charlie’s father is a financial adviser in the wealth management division of a major firm, and his mother is a corporate treasurer. So it’s no wonder that he tells me he’s been “a saver for quite a while” and he likes to watch the news “to see how it affects the economy.”

Charlie has an entrepreneurial inclination, and is planning to start a business after he finishes college. What kind of business? He figures he’ll figure out what consumers want, and start marketing and selling a product.

Charlie Tiseo is living proof that if you expose children to good money habits, and teach them about the basics of personal finance, you’ll wind up with one very Money Smart Kid!

Who needs an education on financial literacy?

April is Financial Literacy Month – a nationwide effort to “highlight the importance of financial literacy and teach Americans how to establish and maintain healthy financial habits,” according to Wikipedia. Yes, the effort to spread the word about the importance of financial skills and capability has earned a place in our national consciousness, spurred on by the results of the mortgage crisis.

Here in Chicago, we have MoneySmart Week. In fact, it’s the 10th anniversary of this event, which has grown from a day of classes in public libraries to a week filled with financial education events throughout the Chicago metro area. In fact, today I will be speaking at the Harold Washington Public Library at noon, a free event open to the public, sponsored by the Financial Planning Association of Illinois. After the talk, there will be a chance to meet with one of the many Certified Financial Planners to get some insight and answers to your individual questions and situation.

We’ve recognized the need for financial education. Groups like Junior Achievement and Jumpstart and the Council on Economic Education are providing programs and resources for classrooms. Every financial institution sponsors events in the community, and offers resources on its website.

But the one group that seems to need financial education most, and has access to the greatest resources, appears to have the least financial literacy of the entire population.

I’m talking about Congress, of course!

That is where our financial illiteracy is most apparent. Think about it. During Financial Literacy Month, there will be innumerable courses taught across the country about the basic tenets of budgeting your money. Yet Congress hasn’t been able to agree on a budget for the past three years!

And the most basic tenet of budgeting is to spend less than you earn, and set aside a small amount regularly for savings. That’s certainly a lesson that Congress needs to learn. For the past 23 years they’ve run a budget deficit every single year – spending far more than they take in.

This year the gap will be nearly $1.3 trillion dollars. Just for this one year! Add up all those deficit years and you get our National Debt – now bumping up against the $16 trillion dollar mark.

Many young children – and I include myself years ago – have awakened during the night to hear their parents arguing about money: where it went, how it was spent, what they can’t do because there isn’t enough money. Parents find a solution – whether they cut back, or take a second job, or work longer hours. They know that they can only borrow so much before they reach the limit.

But Congress argues into the wee hours about “raising the debt ceiling.” It never seems to occur to them that they must take real steps to deal with their imbalance. Of course, Congress does have an out that is not available to most people: Government can simply “print the money” – something the Fed threatens to do these days as the economy starts slowing again.

I was in Washington, D.C., April 16, as part of Financial Literacy Day on Capitol Hill. The irony seemed lost on most elected officials and staffers who attended the “literacy fair” in the Hart Senate office building. They came to praise the organizations and volunteers who develop financial literacy programs for our children and communities. They could start by setting a good example. And that’s The Savage Truth.

Terry Savage is the Chicago Sun-Times’ nationally syndicated financial columnist, and a registered investment adviser. Post personal finance questions on her blog at TerrySavage.com and blogs.suntimes.com/savage.

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