There is one subject that will be useful throughout your entire life, but schools rarely teach you about it – money. While money seems like a topic that isn’t a concern in your teenage years, starting your financial education early is beneficial for your financial-well being.
Financial Literacy
Before getting into the reasons why schools should teach students about money, we need to understand what financial literacy is and the current situation of financial literacy among adults and teens.
Financial literacy is the ability to understand and effectively use financial skills. Just like reading and writing, financial literacy is a lifelong skill. In financial literacy classes, students learn about concepts such as saving, investing, budgeting, debt, taxes and more, and then apply these concepts to their everyday lives. Being financially literate can help people pursue financial goals, such as saving for education or retirement, managing debt responsibly, and running a business.
However, studies show that both teens and adults lack basic financial knowledge. According to the 2014 S&P Global Financial Literacy Survey, only 57 percent of US adults are financially literate. The results for teens are just as disappointing. On a 1,000 point scale of financial proficiency level, the average score was 506, suggesting that nearly half of the students have limited financial knowledge. Without receiving guidance on financial matters, teens will suffer from financial debts and money losses.
Financial education is much more important than memorizing the world map or learning the dance moves you hate in PE class
Anyone who has suffered through an extremely dull lesson in school has wondered why they have to learn a complex physics formula that they will never use in their life, or why they are memorizing details about the Punic Wars that they will forget right after the test.
After graduation, students probably won’t need to know the history of Ancient Rome to be successful. On the other hand, financial literacy will certainly affect their decision-making in the future. It is just as important as the subjects taught in school. Therefore, education should also include teaching students useful financial knowledge instead of simply neglecting the importance of it.
Financial literacy will help students make better financial decisions and minimize mistakes
Financial literacy correlates with financial well-being. Emphasizing the importance of financial education and gaining financial knowledge during adolescence will benefit students in adulthood.
More importantly, starting financial education early prevents students from making lifelong mistakes. Students who have taken financial courses from an early age are less likely to rely on high-interest credit cards or private loans. In addition, they are more aware of the financial resources available when they enroll at university.
One of the most common financial mistakes that college students make is not creating a basic budget. They find their wallets empty towards the end of the month and have to ask their parents for more allowance. High schools should offer financial literacy courses to educate students about budgeting and the risks of debt. A unit on money management in a home economics or health class would teach students about budgeting, saving, and spending. Without this knowledge, in the long term, students could suffer from cycles of debt and poor credit ratings.
Financial literacy is a tool for students from low-income families to escape the poverty cycle
As stated above, financial literacy is tied to financial well-being. Based on reports conducted by Standard & Poor’s Global Financial Literacy Survey, “only 4% of children from low-income families will break the cycle of poverty and break into the upper-middle class.”
There are many underserved communities such as the rural population and aboriginals suffering from the current economic crisis. As such, educating students to make smart and effective financial decisions needs to be a priority. Students need to start developing financial literacy in schools because it offers them a better chance of breaking into the middle class.
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Schools should teach students about money to highlight the importance of financial education and educate students on basic financial skills that will come in handy when they grow up.
In addition to starting financial education early, it is also important to take a further step and require continuous financial training in college. Financial literacy is a lifelong skill and financial education is a lifelong lesson. Financial knowledge can open the way for students to have a better financial future and accomplish the goals they’ve set.
this is so true i’m sorry but when did anybody ever need to know about when England or China became a dynasty? NEVER. so why shouldn’t school teach you real life lessons? LIKE FINANCIAL AND BUSINESS LIFE SKILLS! We are always going to need this but we don’t learn that? What happened to being able to be free? well no one is ever going to be free not knowing how to associate with people.