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Should Financial Education Be Taught In Schools?

We live in a time when teaching financial responsibility to children and young adults is increasingly important. In fact, data from the Federal Reserve shows that 40% of American Households cannot withstand a financial emergency  of $400 or more.

While it’s likely that no one will argue that  financial education is vital to kids growing up to be economically successful adults, there is sometimes debate on who should teach them these skills. Historically, the skills of financial literacy have been taught by  parents based on the family’s values and resources. What happens, however, when parents don’t have the financial literacy  knowledge to pass on to their children? A 2016 study by FINRA reported that 60% of American adults have not been offered financial education by a school or employer, and even fewer have taken advantage of the education offered.

Financial Education In Schools

Kids Need Financial Literacy

A 2011 Charles Schwab survey revealed that of the 1,132 teens between 16 and 18, that were surveyed, 42% stated they wanted their parents to talk more about finances and money. A mere 32% of these teens stated they knew how credit card interest and fees work. For a group of teens and young adults who are nearing the end of their high school career, these kids are in jeopardy of struggling on their own financially when they enter college or the workforce.

It makes sense that  financial education is taught in schools along with the standard core subjects of  English, math, and science.  Teaching financial concepts in the classroom is one promising way to improve financial capability and economic success for young people and ensures that all kids have an equal opportunity to learn about finances, regardless of their family’s financial background or experience.

According to the Council on Economic Education:

  • More than half of states don’t require high school students to take an economics class.
  • Only 17 states require high school students to take a course in personal finance.
  • Studies show that students without a financial education are more likely to have low credit scores and other financial problems.

Financial literacy education in schools may look like this:

  • Provide teachers with support and training to teach the skills needed
  • Integrating financial literacy with hands-on practice
  • Improving or introducing education standards

 

 Financial Literacy – What Can We Do?

We may not be able to change the laws and education standards for our entire state, but we can push for financial education in local schools. Parents and family members can be effective in creating change in their children’s schools. Consider going to your child’s school and asking how financial education can be incorporated into the curriculum. Parents should not be afraid to ask for a required class on financial literacy.

And if your local schools aren’t offering the financial literacy needed, we need to take ownership of making sure that our children get the information they need. Parents can talk to their children about planning for the future and caring about money. Websites like econedlink.org offer resources for parents and educators, such as video lessons on the federal budget and unemployment.

Financial education can make a difference. It can empower and equip young people with the knowledge, skills and confidence to take charge of their lives and build a more secure future for themselves and their
families. We can be part of the solution.

Consumer Education Services, Inc. (CESI) is a non-profit committed to empowering and inspiring consumers nationwide to make wise financial decisions and live debt-free. Speak with a certified counselor for a free debt analysis today.

  free financial counseling  

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13 responses to “Should Financial Education Be Taught In Schools?”

  1. It’s crazy that more than half of states don’t have a finance or economics class as a requirement for high school graduation! Financial literacy is a skill that’s really important for adult life. Students definitely should learn how to manage finances.

    Reply

    • Most definitely. I taught a finance year long class at the junior, senior level, but I was only one of 6 in the state. Pretty sad. Financial ignorance is what caused the 2008 recession and allowed predatory lending to happen.

      Reply

  2. Many young adults and high school graduates struggle with handling their own finances due to their inexperience. These individuals must learn personal finance “the hard way” by following a trial and error method; this may result in a wrecked credit score and of course a loss in money. Although unlikely, young adults and high school graduates can seek advice from a private financial advisor, but the sure way to teach finance is to include the class into high school curriculum. In order to graduate high school, a student must take certain classes and earn credit, classes like English or Government. These classes benefit and prepare students for their future endeavors and financial literacy classes would do the same, however high schools do not require this class. Students and young adults would find themselves more financially prepared if personal finance classes were required in order to receive a high school diploma.

    Reply

  4. I am a student and am currently taking a financial literacy course and an SO glad I am taking it! It will definitely help me for my adult life!

    Reply

  9. Some steps:
    1. Start tracking your monthly expenses
    In a notebook or a mobile app, write in every time you spend money. Be diligent about this, because it’s easy to forget. This is the foundation for your budget.
    2. Identify fixed and variable expenses
    Fixed expenses are ones that you have every month: rent, mortgage, car payment, electric, bill, water bill, student loan payment. Variable expenses are costs that go up and down each month and ones that come and go – groceries, pet supplies, haircuts, concert tickets, etc.
    3. Add up the totals
    After three months, calculate how much you are spending, on average, per month. And look at the categories.
    4. Study your variable expenses
    This is where most people tend to overspend. Decide what gives you the most pleasure from these monthly expenses that you feel these costs are worthwhile? And which ones can you really do without? Be honest, and start cutting. This is the beginning of the hard decisions.
    5. Factor in savings
    A key part of budgeting is that you should always pay yourself first. That is, you should take a portion of every paycheck and put it into savings. This one practice, if you can make it a habit, will pay dividends (literally in many cases) throughout your life.
    6. Now set your budget
    Start making the necessary cuts in your fixed and variable expenses. Decide what you want to save every week or every two weeks. The leftover money is how much you have to live on.
    Its good concept to build on

    Reply

  12. It’s crazy to me that in 2020, schools aren’t teaching financial education. There’s a reason most people grow up and don’t have a healthy relationship with their personal finances.
    Along with pushing for financial education in local schools, parents and family can also help teach their kids about money as well. There are a lot of great resources out there with fun educational kids games on finances.
    Thank you for the great article!

    Reply

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