The demand for financial literacy education among high school students has increased in recent years. With the ease of access to bank accounts and credit cards and the fear of abuse, mishandling or scams, financial literacy has become a need for teenagers as they turn into adults.
Only eight states have statewide requirements to pass a personal finance course. Five other states are implementing this requirement, with Florida being the largest state to do so. Previously, Florida offered an optional personal finance course, but only 5% of students took advantage of it.
Educators and financial experts agree that high school students are old enough and wise enough to understand financial literacy information.
Why do we care?
Research shows that low financial literacy leads to difficult financial situations throughout life. As indicated herelow financial literacy tends to lead to insufficient savings, difficulty paying bills on time, and, perhaps most importantly, many more hours per week worrying about personal finances.
Taking a required personal financial literacy course does not prevent such results, but it can lead to a better understanding of money-related decisions and how those decisions lead to better financial health in the future.
Here’s what schools or programs should teach teens.
Financial Literacy Topics
Financial literacy courses provide the basics of money management. They provide basic knowledge to create a solid financial foundation and prevent young people from making mistakes that create financial difficulties early on. Such struggles can persist, preventing young people from achieving the financial stability they need to live an adult life.
Here are the topics most often offered in financial literacy courses:
- Budgeting: Basic budgeting involves tracking your income and expenses. The goal is to make these two numbers equal or to have more income than expenses.
- Debt: It is very easy to get into debt these days. Credit cards invite debt, as do auto loans. It is important for young people to know how much debt they have, how much their debt is increasing due to interest rates and how they can reduce their debt.
- Economy: There are two ways to approach savings. Set aside the difference between what you earn and what you spend each month, or figure out how much you want to save each month and manage your income and expenses accordingly. The value of having a savings account comes when trying to acquire credit; your credit score and your credit rating are both determined by the amount of money you can keep.
- Invest : From a fundamental point of view, investing consists of placing your extra funds in a financial tool that will produce additional funds in the form of interest. Savings bonds, interest-bearing savings accounts, and individual retirement accounts or 401(k) accounts are the simplest form of investment.
Ways to gain financial knowledge on your own
Many people believe that our schools should teach middle and high school students basic or secondary financial literacy. If you haven’t had that chance, or if you want to educate your child on financial topics at home, here are some ways to do it:
- youtube videos: Say what you want on social media, but YouTube’s instructional videos can teach us how to do it ourselves in almost every category imaginable, including understanding financial literacy. If you’re seriously considering using YouTube for this purpose, find out which instructors post instructional videos. A simple search on the Internet will reveal the good faith of the instructor. Also pay attention to the nature of the instruction. Is this a general overview or a step-by-step lesson similar to what you might get in school? Take notes, just like you would in school. Forbes suggests Graham Stephan, Ryan Scribner and Nate O’Brien among top YouTube instructors. Personal finance guru Dave Ramsey has a large following for his Youtube channel as well.
- Books: The “…For Dummies“The series is a great starting point. As you become more literate, the sophistication of the books you read will increase. You can show off your knowledge early by purchasing copies of these books from used book stores.
- Online resources: There are websites dedicated to personal financial questions and concerns more than financial literacy, but they can help you avoid making financial mistakes. Sites like nerdwallet and ThePennyHoarder are likely to have articles specifically targeted to answer your personal financial questions.
- Community colleges: Community colleges often serve to provide an education that in one way or another has been lacking in high school students, and financial literacy is the perfect example. You don’t need to get a degree to take classes at a community college. To find such a school near you, look here.
One last thought
If you’re a parent concerned about the financial literacy of your adult children, offer all the advice you have. Of course, it’s very possible that you’ve made some personal financial mistakes along the way. They are precious: don’t be afraid to admit them to your children so that they don’t make the same mistakes.
The Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are intended for general informational purposes only and should not be construed or construed as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or other personal finance advice. Epoch Times assumes no responsibility for the accuracy or timeliness of the information provided.