By Arkadi Kuhlmann, Founder and CEO of ZenBanx, Founder and Former CEO of ING Direct
The lunch table conversation was light and collegial, focused on the upcoming weekend activities until my colleague burst the jovial bubble by asking if everyone had fully funded their 2014 and 2015 IRAs. Squirming ensued. All of the 20 and 30 something Silicon Valley tech professionals were clearly outside their comfort zone. One young woman shared that she started the process but stopped when she learned she needed to choose investments for the money. “I can write Code, but have no idea about finances and investments, she confessed.” A teammate jumped in commenting, “My wife’s parents keep asking us if we are saving for a house, but we’re too embarrassed to tell them we don’t even have a budget or a savings plan set up.”
In Silicon Valley, where over half of the 2014 Harvard Business School MBA class moved after graduation, not one of the eight professionals at the table had an IRA, nor did they contribute to the Company’s 401k plan.
I’d like to say I’m shocked, but that emotion occurred years ago when I first understood the dismal state of our nation’s financial fitness, joined the Council for Economic Education and became an advocate for Financial Literacy curriculum in our schools. Despite surveys and focus groups that consistently reveal that students required to take a financial literacy class in high school are significantly more financially responsible, more averse to debt, and more likely to pay off credit card debt on time than their peers who did not, only 22 states mandate an economic education course as a pre-requisite for graduation and only 17 require a personal finance course.
As parents, employers and mentors, we can talk about needs versus wants and the value of savings versus spending. That is if we, as parents and employers, are ourselves financially literate and managing our savings, spending and debt, and investing for our retirement and healthcare needs. As employers, we can offer 401k incentives to encourage financially responsible behavior, but without the understanding of economics, those are grains of sand and Band-Aids.
Lacking a financial fitness foundation, young adults are assuming college loans with no understanding of the cost or process to repay them. Students and work-force ready young adults graduating high school without any foundation in credit scores, credit cards or mortgages, charge forth into life and debt, and resort to credit cards to fund their fun.
While a handful of states recognize the importance of economic and financial literacy education, all states need to do so in order to positively impact future generations. Each of us can help our youth navigate life to the best of their abilities by encouraging our state and local representatives to designate economic education as a subject of critical importance that should be taught to every student before graduating from high school. Navigating the future will require our youth have a toolbox complete with job skills, an understanding of personal finance and budgeting, along with flexibility, fortitude, and compassion. Let’s make certain the toolbox is full.
 http://www.businessinsider.com/harvard-business-school-graduates- move-to-silicon-valley-2014-7