I had been waiting to turn 18 for what seemed like a thousand years and COVID-19 made my year as a 17-year-old even longer. But 18 turned out to be a lot more to bargain for than I expected. My dad took it upon himself to teach me the ins and outs of credit, taxes and budgeting. And it was at that moment that I realized 18 did not transform me into an adult and that I had very little education regarding financial literacy. The realization that after 12 years of school, I still didn’t completely understand basic financial literacy principles led me to begin listening to my father’s Audible recommendations and do more research on education in the United States. This research led to an alarming fact: many students are not prepared for the financial obstacles ahead.
Though the lack of economic education has been at the forefront of many discussions regarding education, only 21 states require personal finance to be integrated into classes. That may seem like a large number until one sees that, as of 2018, 33% of Americans having no money saved for retirement, and 43% of student loan borrowers are not making payments, the number seems insignificant. This statistic is even more alarming when we see college tuition rising and more and more students needing to take out loans, especially in low-income households. We are entering an age where more people are taking on debt that they have no idea how to pay back; an age where people go into standard 9-5 jobs unaware of how much they need to save to be able to retire by 60; an age where we need financial literacy more than ever.
So what can we do? The President and CEO of the Council for Economic Education, Nan Morrison, states that integrating personal finance into classroom instruction is the key to raising financial literacy in schools. A study done by the FINRA Investor Education Foundation found that four in five youths failed a financial literacy quiz. That is incredibly alarming and a trend that can only be stopped by requiring financial education in K-12 schools, either integrating them into the curriculum or creating stand-alone curriculums. An economist from Montana State University, Carly Urban, agrees that there are worries that requiring personal finance classes will possibly take away school time from another important course; yet, she stresses that there is much research showing the correlation between good financial outcomes for individuals and states that have personal finance ingrained within the standard curriculum. I do believe that the exchange is worth it. Though you may not be able to take that fun elective or get ahead by taking another AP, you would have all the tools you need to lessen financial anxiety and be better with your money.
Having personal finance taught in high school will immensely help how the United States fails its citizens when it comes to financial literacy; but we still have a long way to go. Luckily, we can take steps to take our financial education into our own hands. Warren Buffet, one of the most successful investors of our time, once said that the best investment you can make is in yourself; investing time and money into the acquisition of financial wisdom falls under that umbrella. We can read or listen to books, though it sounds old school investing in books that focus on financial education — “Rich Dad, Poor Dad;” “The Millionaire Mindset;” “Outliers;” etc. — can change your outlook on finance and money. Along the same lines, there are countless podcasts, blogs and papers on the web that can help you gain perspective on all things finance.
There are many ways to increase your financial literacy, and American public schools need to do more to utilize these tools and churn out students well prepared for taxes, budgeting and other money-related problems. But the fact remains, financial literacy is crucial to having success and stability in the future.