Teaching Financial Literacy To Kids
Most people agree that financial literacy is a very good thing. After all, everyone has seen the issues that happen when people don’t understand how their money works. Unfortunately, it’s more difficult to make people agree on when financial literacy should be taught. While more states are making personal finance classes a graduation requirement, there is evidence to show that students should start learning about money earlier. Below are just a few of the reasons that show students benefit from financial education and why these subject should be taught earlier than they are today.
The Parents Won’t Do It
Studies have shown that parents are incredibly uncomfortable talking to their children about money. This might have to do with taboos surrounding finances or a lack of education on the part of the parents, but the typical belief that students learn about financial literacy at home may well be false. If students aren’t going to learn from their parents, they absolutely must learn it somewhere else. If teachers don’t provide students with financial literacy, they will have to learn it through experience.
It Matters for College
Student loans are a fact of life. Many students in the United States will have to borrow at one point or another to finance their collegiate careers, but they may not understand what taking out loans might mean for their futures. Unfortunately, giving students all the information they need about loans just before starting college tends to overwhelm the students and get lost in the shuffle. If teachers start early, though, students will go into the college application process with a better idea of what it will mean for them financially.
Financial education also helps students avoid common financial pitfalls. Whether better education, students will be able to avoid the predatory credit card schemes that permeate college campuses. They will also be able to avoid high-interest loans. Perhaps most of all, though, financial literacy helps students determine if their higher-education plans make sense. Simply being able to understand the concept of a return on investment may make a huge difference in how some students look at their futures.
It Helps Them Save
It should come as no surprise that the average child doesn’t have a good idea of how to save money. It’s natural to have trouble delaying gratification and most students don’t have a good idea of how saving money will impact them. Enacting programs like school banks or classroom financial literacy programs helps students to learn the value of saving. Doing this might help students to learn how to put their money away and how to make interest work for them – something that will become ever more important as they move out into the world.
Students who save are also students who will understand why savings matter. These are students who won’t have to take out payday loans when their cars break down and won’t have to declare bankruptcy because of simple financial decisions. If teachers can educate students about money earlier, they can help their students make more advanced financial decisions as they get older.
It Helps Communities
While we might like to believe that financial knowledge is something that only impacts individuals, the truth is that failure to understand how money works is something that hurts entire communities. Students who are better educated in financial literacy are more likely to be able to make smart investments and to stay ahead of the curve when it comes to savings and other monetary issues. When individuals have a better grasp on their finances, they can bring their knowledge into the community – thus bringing up the financial standards of everyone else.
Teachers know that students are the future in an abstract sense, but it can be difficult to remember that this future takes place in the communities in which teachers live. Those who want to have a thriving community in the future need young people who will be able to manage their financial affairs properly. The only way to ensure this is by giving them the education that they need. Financial education makes the world better not just for students, but for all who are involved with them.
It Has a Lasting Impact
Financial literacy courses on how students view and behave around money. This isn’t just a short-term change, either – it stays with students beyond their tenures in high school. If schools can teach students about money early on, students can change their relationship with debt, credit, and with money. This will make for a generation that’s not just better equipped for dealing with financial matters, but one that might be able to avoid some of the mistakes of generations past. The earlier students start this change, the more they will internalize the lessons and the better their financial futures will be.
Financial education is a complex topic that requires students to build upon several years of knowledge to achieve any measure of mastery. While most subjects in high school and below are simply an introduction to what these students will learn in college, financial literacy is something that students will need to know before they graduate. The earlier that students start to learn about how to control their own finances the better. After all, it’s never too early to begin learning what’s necessary to become a responsible and contributing member of society.