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Importance of Financial Literacy Education in High School[emailprotected]2024-08-16T21:18:26+00:00
Importance of Financial Literacy Education in High School
Most Americans think that their education system is complete and that after passing the requisite courses, we know all we need to know to begin our lives. Sadly, this is not the case. There is at least one glaring gap that is largely not addressed in our school system. Until recently, educators have overlooked the importance of financial literacy education in high school. This is shocking, considering that financial literacy is a critical life skill that is the foundation for a secure life. Personal money management skills are often the difference between a life lived in poverty and a life of abundance. We can no longer afford to ignore importance of financial literacy education in high school.
Education on Financial Literacy in High School Instills a Sound Lifelong Framework
The importance of financial literacy education in high school is to instill a sound framework for making sensible financial decisions that will remain with students for the rest of their lives. The importance of financial literacy education in high school is affirmed by the large number of research studies that have linked early education in personal finance to improved financial outcomes over the course of the students’ career. Despite the pressing nature of financial literacy education, many high schools do not require any financial education programs.
High School Financial Literacy Courses Dramatically Improve Lives
Researchers take advantage of a survey recording self-reported savings rates, as measured by amount of unspent take-home pay along with voluntary deferrals (e.g. 401(k) plan), and the state the respondent went to high school in. This is used to determine whether state mandated financial education curricula have an impact on the amount individuals save. Those entering high school five years after the implementation of the mandate had a savings rate of 1.5 percentage points higher than for students not exposed to a mandate (National Bureau for Economic Research). http://www.nber.org/papers/w6085.pdf
Attending an employer-sponsored retirement seminar saw net worth increase by nearly 27% for those who were in the lowest income bracket and had not received a high school diploma (Dartmouth). http://www.dartmouth.edu.
A statistically significant association was determined between negative financial habits, such as gambling among Australian youth, and the influence of peers and parents (Science Direct). https://www.sciencedirect.com/science/article/pii/S0140197103000137?via%3Dihub
Researchers at NBER demonstrated the positive relation between the average stock market participation between the individual’s community and the individual’s participation rate in the markets. This effect was proven to be stronger in more sociable communities (National Bureau of Economic Research). http://www.nber.org/papers/w13168.pdf
Learning Financial Literacy in High School is Important
37% of recent college graduates have been late with a student loan payment at least once in the past year (US Financial Capability). http://www.usfinancialcapability.org/downloads/NFCS_2015_Report_Natl_Findings.pdf
85% claimed they were ‘somewhat’ or ‘very’ unlikely to discuss their amount of credit card debt with strangers, more than the percentage of respondents who would avoid divulging details about their love life (CreditCards.com). https://www.creditcards.com/credit-card-news/poll-credit-card-taboo-subject-2013-1276.php
44% of Americans aged 22-26 do their own taxes (Bank of America). https://bankofamerica.com
Pregnant or parenting teens are more concerned about learning to save for a home in the future than learning how to save for college (Youth.gov). https://youth.gov/youth-topics/financial-capability-literacy/facts#_ftn8
31% of adults report they have no savings and 29% report they are saving more than they were last year (National Foundation for Credit Counseling). https://active.nfcc.org/newsroom/financialliteracy/files2013/nfcc_nbpca_2013%20financialliteracy_survey_datasheet_key%20findings_032913.pdf
Quality High School Financial Literacy Programs
Financial education has repeatedly been found to induce positive behavior change. In order to achieve a similar effect, new financial literacy curriculums must be constructed with careful consideration of developments in recent research and industry tested best practices. Only when done correctly can financial literacy education efficiently transfer knowledge from educator to learner and encourage a revision of the financial habits of the program participant. Only a few states require a personal finance course – learnwhat states require financial education in high school.
The JumpStart coalition accentuates that in a good financial literacy program, materials are thoroughly reviewed before being published, and feedback is gathered from both teachers and students to revise the program (Jumpstart.org). https://www.jumpstart.org
The Consumer Financial Protection Bureau (CFPB) encourages financial educators to launch a multi-stage project to assess whether there are more potent methods by which to reach low-income and minority communities (Consumer Financial Protection Bureau). https://files.consumerfinance.gov/f/201407_cfpb_report_financial-literacy-annual-report.pdf
Experts on the Importance of High School Financial Literacy Education
“Without financial literacy, divorce rates soar, families rupture, and women stay with abusive men for financial security. A lack of jobs contributes to riots and illegal activity. Name any situation and it goes back to money. We need to focus on poverty eradication.” – John Hope Bryant, CEO of Operation HOPE
“Academic qualifications are important and so is financial education. They’re both important and schools are forgetting one of them.” – Robert Kiyosaki, founder of the Rich Dad Company
“The good news, though, is that all of us can improve the security of our futures through financial literacy. With a better understanding of the basics of finance—how to save, budget and invest—we can increase both our earning potential and our prospects for a solid financial future.” – Reba Dominski, President of U.S. Bank Foundation
Why is There a Lack of Financial Literacy Education in High School?
With the importance of financial literacy education in high school so established, it is a puzzling fact that a majority of high schools do not require any form of personal financial education in order to graduate. These schools are not teaching financial education and graduating students with little to no knowledge in a skill that is absolutely required for sound financial health. In order to amend this dangerous issue, advocates and financial educators must explain the importance of financial literacy education in high school to public policy makers. So why is receiving a financial education important? Because unlike all other subjects, it benefits 100% of the students.
