Imagine living in a simpler, more straightforward world where you could learn the fundamentals of managing your money, creating a budget, saving money, paying taxes, applying for financial aid and student loans, and opening a bank account in high school. Imagine how much simpler your life would have been and how much more knowledge the typical person would have about how financial institutions that are essential to adulthood operate.
Too many individuals, both older and younger, have just a shaky understanding of the concepts or basic operations of finances; thus, teaching children and high schoolers about financial literacy in the classroom can be highly beneficial, if not now, then in the future.
What Is Financial Literacy?
Financial literacy is simply understanding concepts like debt, investments, and savings that help people feel secure financially and confident in themselves. Understanding these concepts is typically transferred in financial literacy programs, educating students and laying the foundation for them to develop healthy financial habits at a young age and avoid making mistakes that lead to ongoing financial issues. The definition alone provides strong arguments that should be more than enough to persuade anyone who previously questioned whether or not schools should offer financial literacy courses that it is necessary and should be incorporated as soon as possible into the curricula.
What Is Taught in a Financial Literacy Curriculum?
Undoubtedly, it is an excellent thought to imagine empowering young people and the next generation by teaching them how to manage their money wisely and enabling them to beat the growing debt statistics. But how can we get there, though? That’s simple since The Five Foundations are a series of stages that can assist kids in learning how to handle their funds. And this is how it goes:
- The first foundation: Set aside $500 in case of emergencies. The first important lesson that kids are given is the need to save money for emergencies. Emergency funds may initially seem insignificant but are far more significant than they appear to be. Students are taught the value and benefits of saving.
- The second foundation: ensure you keep away from debt. Most individuals spend their entire lives paying off debt, which can feel like a chain around their necks. An excellent financial literacy program shows students how debt can imprison them and how to escape it as soon as possible.
- The third foundation: Purchase your car in cash. Despite having a car for years, you still have to pay for it every month, making cars primarily liabilities. Students are encouraged to acquire older or used cars instead, paying cash up front, which, while requiring some saving, will ultimately be worthwhile.
- The fourth foundation: Pay for college using cash. It is common knowledge that the severity and prevalence of the student loan crisis will only intensify as time goes on. More and more young people are being impacted by this and are unable to leave their parent’s houses or even accumulate money for retirement. Financial literacy training for students may ultimately spare them from this outcome.
- The fifth foundation: Amass wealth while giving. Imagine a time not too far off when students can live debt-free lives due to the skills they have learned from financial literacy classes. Imagine the change if anxiety or financial concerns were no longer a significant concern. The last and most entertaining foundation to imagine is this one. People who are happy with their financial condition tend to be more giving and contribute more to society. The fifth foundation teaches students that by simply taking these actions, this can become much more than just a dream.
Importance of Financial Literacy
Students who take financial literacy classes gain confidence in their ability to manage challenges relating to their financial situations.
In the lives of students, financial literacy is unquestionably necessary. Examples include:
- Financially literate students learn to minimize debt and pay it off much more quickly. And if you are already heavily in debt, financial literacy can show you the best ways to get out on your own.
- Many high school students and adults have exhibited a steady decline in their financial literacy, according to studies from many sources. Many of these individuals had, at most, a rudimentary grasp or knowledge of concepts like borrowing, investing, etc. Financial literacy classes can help to curb this trend and help the younger generation grow to understand many of their financially related issues.
- Financial literacy can assist students in planning for both short-term and long-term objectives, as it enables them to comprehend the importance of having a solid retirement plan and precisely how to do so.
- Financial literacy also enables students to comprehend the value and necessity of budgets, how much money they make, and how much of it is safe to spend. Having a budget also makes it much simpler to monitor spending and make necessary adjustments.
The effects of making early financial missteps
Financial missteps made as young adults can have severe consequences as you age, including debt, and a low credit score, which frequently leads to despair and worry. Financial literacy programs should be taught in schools because many students lack a basic understanding of how finances operate and how to avoid all of this.
Why we Believe High Schools Should Have Financial Literacy Classes
Financially literate students do more than merely manage their finances wisely. They develop positive behaviors that eventually spread to their families, towns, and country. Also, the toxic money culture will shift due to this trend, ushering in a new normal. One student at a time, too, is affected. Imagine the head start your child would have in life if they were budgeting, saving regularly, and making sensible financial decisions before they even finished high school! They might have tens of thousands of dollars in the bank, a car that is paid for, and a start-up retirement fund. Overall, there are several benefits of teaching financial literacy to high school kids, which would help them become more rounded grownups.
