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How many high school students have taken a required math class and asked themselves, “Will I ever do (fill in the blank) in my daily life?”
2020, Forbes Magazine asked 900 Freakonomics podcast listeners similar questions about algebra, trigonometry, and calculus. Less than 12 percent of people reported using the lessons from these particular high school math classes in their daily lives.
Then insert “personal finance skills” into the sentence.
Anyone who is thinking about buying a car or home, taking out student loans, getting a credit card, eating out or cooking at home, or making other decisions related to their personal finances will benefit from positive feedback. may answer.
However, statistics show that many Americans lack the financial literacy to make informed decisions related to their personal finances. More than one-third of American adults report having more credit card debt than they have emergency savings. 68% doubt they would be able to cover a month’s worth of living expenses if they lost their main source of income. According to Annuity.org and Bankrate’s 2023 Annual Emergency Savings Report, 25% report having no reliable source of financial guidance. Despite the data showing a lack of financial literacy, there is reason to believe that future generations of American adults will have a stronger understanding of this issue.
This is because there has been a flurry of recent state legislation aimed at improving financial literacy among high school students.pennsylvania In December, it became the 25th state to pass a law requiring high school students to take a personal finance course. The number of U.S. states working to improve financial literacy among teens has more than tripled since 2021.
“In the last two and a half years, we’ve gone from eight states to 25 states,” said Tim Lanzetta, co-founder of Next Gen Personal Finance, a nonprofit that provides free resources to educators and financial literacy advocates. says Mr. education.
John Pelletier, Director of the Center for Financial Literacy at Champlain College and Author of the Annual Report This topic looks at recent growth. “Within five years, more than four out of 10 high school students in the United States will enroll in schools that require a separate, full-semester course in personal finance before graduation,” he said. “This is a 229 percent increase from 2017.”
Pelletier is one of several financial experts who argue that the pandemic is a major catalyst for states’ sudden interest in financial literacy curricula. “This was a wake-up call,” he said, noting how the pandemic has exposed widespread fiscal vulnerabilities in the country, from individual households to businesses.
Supporters of including financial literacy in K-12 education argue that the new requirements cannot be implemented quickly.
Financial literacy: why it matters
High school students may not be as financially responsible as adults. But some people are in a position to begin to exercise serious purchasing power. 18 is the legal age to apply for a credit card. Teenage students can also apply for student loans for college.Personal finance courses covering income earning, spending, saving, investing, and credit management, topics approved by the national standards for personal finance education.—Tends to make better borrowing decisions, according to government report. Additionally, financial education has been shown to help young people better manage cash flow and pay their bills on time, according to the Center for Financial Security..
Why do we teach personal finance in schools?
Experts say the most likely and logical place for teens to learn about personal finance is school. And since most personal finance courses are proposed as standalone courses over a semester, they can be replaced by electives of the same length.
“If we don’t teach it in schools, they’re going to learn it on social media,” Lanzetta said. Some, but not all, of these financial influencers, known as finfluencers, provide sound financial information, he said. Others may benefit from the advice you share.
Some people wonder why students don’t rely on their parents to teach them about money. However, not all adults are financially literate. And managing personal finances remains a taboo topic in many families, with parents reluctant to share information about their finances and decisions that affect them, says a student at De Pere High School in Wisconsin. Kelly Harrild, a teacher who has been teaching personal finance for about 20 years, explained. She calls it her proudest educational achievement.
“Students don’t know what they don’t know,” she said. “If they know better, they can do better.”
Harild said this applies to all students, from those who attend regular classes to those who tend not to see the value of education.
“Their brains may not function the same way as our K-12 system,” she said. “And when they hear about this economic thing, they’re like, ‘We finally have something we can use.'”
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