The Importance Of Financial Literacy For Teens
In today’s world, financial literacy is practically a necessity. From keeping a budget to paying taxes, it is undeniable that people need to know how to effectively use their finances as an essential skill. Despite this trend, it is astounding how little the topic is brought up in schools all around the globe. With courses of mathematics and liberal arts incorporated into their everyday lives, there is no reason to exclude economic literacy from students’ curriculums. Overall, adding a financially educating aspect to schools would be beneficial to the future leaders of our society.
According to the Financial Industry Regulatory Authority (FINRA), 53% of individuals with high financial literacy spent less than their income, and 65% had set aside a three-month emergency fund. Financial literacy is clearly a core life skill that will heavily impact how young adults make decisions regarding their personal assets. As the world constantly evolves through economic and technological developments, educating future generations to carry on the legacy starts by teaching true life skills in the classroom.
As teenagers begin to explore their freedom and become less dependent on their parents, it is imperative that they should possess the knowledge to survive in the harsh reality of society. Studies have shown that young adults without any financial education go on to face various challenges that result in financial instability, debt, or worse.
While options such as taking an economics class exist, students are arguing that schools do not offer courses that specifically focus on the different aspects of managing finances in everyday life. For example, AP Macroeconomics is known as quite a popular class for high school seniors looking for a foundation in the field of economics. However, the classes available to students do not include any concepts regarding financial literacy. Instead, The College Board organization states that advanced placement economics courses offered in high school include topics of “Basic Economic Concepts” and “Market Failure and the Role of Government”. While these topics are certainly important, many argue students’ time and education is better spent focusing on applicable concepts that more directly affect them.
Our school systems currently do not offer any courses that focus specifically on educating students about the responsibilities that come with handling money. The youth today simply aren’t given enough resources to sustain their new roles as future leaders. As teenagers grow into young adults, they become more independent and increasingly need the skills to handle the authority over their own lives that they are given.
While some may argue financial skills can be learned through experience, it is of the essence to consider how a few careless mistakes can lead to a landslide of effects on one’s life. For instance, a college student receives a job offer and begins earning approximately $4,000 every month. However, they become infatuated with the idea of earning money and completely disregard their student loan debt to spend the income on a new computer, clothes, and other nonessentials.
Though it may seem unlikely, students everywhere are not familiar with how to responsibly manage their money, much less how to keep a budget. In order to survive and thrive in our society today, youths need to be educated on the topic of financial literacy early on to prevent worse problems in the future.
At large, it is clear that schools explicitly hold traditional academic subjects as a greater priority than basic life skills for their students. However, we simply cannot overlook the knowledge our next generation will depend on to succeed. With effort from both schools and their students, financial literacy will at last be able to take its rightful place as an essential academic topic in global education.
The Edunomix Institute is a not-for-profit organization devoted to expanding access to practical economic education. Through our research, presentations and classes, we aim to equip individuals and communities with the necessary knowledge and tools needed to make informed economic decisions and promote sustainable development. We strive to foster financial literacy, empower individuals to participate actively in economic processes, and encourage critical thinking about economic issues.