The New Math

Tom Layson / guest Columnist

The kid at the Krispy Kreme donut shop just next door to the South Hill Mall looked at me like I was from another planet.

I could tell our transaction was off to a bad start when I handed him a $100 bill to pay for a dozen donuts costing $7.89. Paying cash makes one pretty suspicious to begin with, but the $100 bill required a special viewing against strong backlight and the secret marker test.

As he punched-in the total and the amount I handed him, the computer dutifully spit out the difference. But a simple calculation of the difference doesn’t make a satisfactory transaction. No, I asked him to count my change back, “Old school.” He had no idea what I was talking about and looked like he was about ready to call 9-1-1.

If you own a business or mentor young people, please teach them how to count back change. As simple as it sounds, this basic form of financial education is part of a broad array of life skills that are just slipping through the cracks, especially when it comes to managing and understanding money.

The kid who can’t count back change will be the same adult who doesn’t catch all the meaningless and punitive fees or errors on his or her billing statements. He or she may be the same person likely to sign a mortgage contract they can never hope to fulfill. He or she may be the corporate manager who decides to buy the next generation’s financially engineered pig-in-a-poke — just as this generation’s brightest lights did and fell victim to the lure of “securitization” and bought and sold financial products they didn’t understand in the prelude to the sub-prime mortgage meltdown.

The point is that financial education starts young. If you’ve been a market timing, fee paying, buy-high-sell-low, over leveraged and under-saved adult — you are a dangerous influence on the young people who watch you operate that way. The safety net can only be deployed so many times, and as debt and demographics eat away at the strength of the our net, the stakes for screwing up will likely only become more severe as time goes on.

So teach you kid how to count back change, and take charge of their financial educations. There’s a very good chance you’ll learn a lot in the process too.

How financial literacy continues to be so glaringly absent from our school’s curriculums is one of public life’s greatest mysteries. The cynical explanation might be that too much financial education in the wrong hands doesn’t play well with the powers-that-be. No matter what the reason though, it’s something parents, kids, teachers and lawmakers need to start demanding.

It’s the only way to make it in a world where a dozen donuts costs $7.89.

You can e-mail Tom Layson and read his blog by linking through www.winpcr.com