Did you know in 2023 Americans owed over 1.13 trillion in credit card debt? This is partly a result of a lack of effective financial literacy within school systems nationwide. The financial system is constantly changing, and students need to know how the economy works. According to an article on Annuity.org, seventy-five percent of American teens lack confidence in their knowledge of personal finance.
Schools nationwide need to prioritize financial literacy with students to effectively educate them on how the economy works. Financial literacy is important in today’s world where knowledge is power; the more a student knows about the economy, the better economic contributor they will be.
According to AP News, the benefits of teaching high school students basic personal finance concepts include better credit scores and lower rates of delinquency on debt as adults. When students learn how to save money, invest, and remember financial terminology, they are less likely to accumulate excessive debt and abuse credit. School systems with financially literate students are more likely to have students graduating who make responsible financial decisions, avoid unnecessary borrowing, and sustain healthy credit habits which will lead to decreased debt and credit usage.
Materialistic Influences
Students in America aren’t taught how to budget money and spend it wisely. The poverty rate will continue to rise as future young adults become poor from spending money on materialistic products if school systems nationwide don’t teach how to prioritize spending. This stems from young adults often being manipulated into thinking that they need socially accepted items; they do so to make themselves appear more favorable because of the influences of social media.
According to The Guardian, young people are under intense pressure to take out store cards and rack up debt to buy gadgets and appear rich. Students not knowing how to budget correctly while spending money on materialistic products will lead to long-lasting debt and financial instability. Without understanding these values of money and how to manage it correctly, they will always prioritize self-pleasures instead of necessities to help maintain long-term health.
As a teenager, I felt the pressure of materialistic influences firsthand, constantly being bombarded by constant ads displaying the latest stuff and fashion trends. It’s hard not to feel the pressure to fit in and try to keep up with students who flaunt expensive items. Nevertheless, giving in to these influences definitely can take a toll on my finances. I’ve ended up splurging on things I didn’t need only to regret it later when I saw a huge dent in my account.
It was a constant battle between managing my money wisely and buying the things that make me feel accepted. Materialism taught me a lot of financial lessons, reminded me to prioritize needs over wants, and helped me think deeply about what I spent my money on.
Family Backgrounds
Some students don’t have families that know much about the financial system. According to LOCAL SYR, there is a steadily increasing amount of students who don’t have families who are knowledgeable in finance. Allowing access to information on how to manage money helps students to be successful in a money-dependent society.
How is it helpful?
Students who take these types of classes will know how to be financially stable even if they don’t apply the methods to their everyday lives. Furthermore, the students who use this information will have the knowledge they need to maintain a healthy financial life.
Conclusion
Implementing financial literacy classes in schools nationally is urgently crucial for preparing students with the necessary life skills. Students will learn essential information on budgeting, saving, investing, and understanding the financial system to make better-informed decisions in their lives. By teaching students these necessities early on before they reach the real world, schools can help push students to learn how to live in the modern world of finances, allowing them to adopt financial independence to use in the future.
