Why we should teach personal finance in high schools

Reading, writing, and arithmetic are important foundations for all school-age students to help prepare them to be productive citizens. The same can be said for personal financial education.

The financial decisions facing high school graduates

Debt.com recently reported “financial ignorance cost the average American almost $1,400 last year.”1 When thinking about graduating from high school, most students are faced with going to college or getting a full-time job, being asked to make many new financial decisions, including:

• applying for financial aid for college
• housing costs
• transportation costs
• insurance costs (health, dental, vision, rental, car)
• food and everyday expenses

And these all coincide with three main categories of students’ financial goals and interests identified by Kailen Stover (May, 2021):

• living on their own
• credit and credit cards
• taxes

High school graduates are underprepared for their financial future

Today’s 18-year-olds face financial and money management decisions from high school graduation to retirement, with the decisions they make now often having long-term effects. However, young adults may not have the experience and education to make these decisions .³

The first major financial decision many high school seniors make is when they commit to a college/university or continued vocational training. Many of these high school seniors do not understand how payment of student loans will affect their budgets or finances beyond college.

Ann Carns (2022) wrote that financial concerns were increased because of the pandemic and the rise of inflation causing a strain on households. She also reports other factors such as student debt levels and precarious retirement security have made it even more imperative that personal financial literacy among high school students be a priority.⁴

How Personal Financial Literacy, 3rd Edition, can help

Personal Financial Literacy, 3rd edition teaches students the essential financial management skills needed for life. It provides students with not only financial or life lessons but allows them to apply those lessons in a real-world context. The third edition:

• teaches language/vocabulary of personal financial planning
• introduces financial plans, cash flow, spending decisions, budgets, and balance sheets
• provides information on renting or buying a home and the importance of homeowners or renters insurance
• discusses savings and investing, introducing the various financial institutions and the basics of choosing a bank, available banking services, checking accounts, savings accounts, retirement savings options, and investing fundamentals (including stocks/bonds/mutual funds)
• teaches how spending and credit affect future financial plans, emphasizing the importance of building good credit, protecting your identity, obtaining personal loans, and using credit cards wisely
• teaches the effects of the economy, government (taxes), and continued education on life-long financial plans
• gives an understanding of the importance of health insurance, life insurance, and other employer-provided benefits

Financial education = successful life

As stated earlier, financial decisions students begin to make right out of high school can and will affect them from graduation to retirement and beyond. Teaching students’ financial skills while they are still in school with a quality curriculum that successfully develops these skills is essential.

Learn more about Personal Financial Literacy, 3rd Edition by Jeffery Madura, Michael Casey, and Sherry Roberts

Sources

¹Debt.com Most Students Aren’t Prepared for Life After High School - Debt.com

²Stover, Kailen (May 18, 2021); “Getting Started Teaching Personal Finance”; Edutopia.org Getting Started Teaching Personal Finance in High School | Edutopia

³Frazier, Liz (August 29, 2019); “5 Reasons Personal Finance Should Be Taught in School”; Forbes 5 Reasons Personal Finance Should Be Taught In School (forbes.com)

⁴Carns, Ann (March 18, 2022); “Bringing Personal Finance to the Classroom for Generation Z”; The New Times https://www.nytimes.com/2022/03/18/business/adviser-students-personal-finance.html