Posted by The question, “Will I ever actually use this stuff after I graduate?” has been asked by anyone who has ever struggled in a difficult high school class.
Students probably won’t need to memorize what E means in E=mc2 on a daily basis after graduation. However, ryan seacrest net worth 2022 one thing is certain: They will require financial management skills, and the sooner they acquire them, the better!
We support teaching financial literacy in schools because of this.
Financial literacy: What Is It?
The fundamentals of money management are taught to students in financial literacy classes: spending, saving, paying off debt, investing, giving, and other things This knowledge lays the groundwork for students to establish solid money habits early on and avoid many of the mistakes that result in financial difficulties throughout a student’s life.
Why We Think Financial Literacy Should Be taught in High Schools As a nation, we have witnessed the consequences of not having a financial literacy curriculum. Every day, millions of Americans struggle financially. Yikes! At least 78% of people are living paycheck to paycheck, frequently relying on their credit cards to get by.1 So it shouldn’t come as a surprise that 71% of people are burdened by debt and believe it’s normal.
In addition, a lack of financial planning, massive car payments, and their own student loan debt prevent many Americans from purchasing homes, investing for retirement, or saving for their children’s education. People are hopeless and deep in debt.
However, this need not be the case! If financial literacy had been taught in schools, many of the financial issues that Americans are facing could have been avoided. We believe that financial literacy classes should be required for graduation at more schools.
Courses in financial literacy teach students how to win with money. So, what are the benefits of learning money lessons as a child rather than as an adult? Students who enroll in a financial literacy course early have the most time to put their knowledge into practice. Additionally, a lot of high school students who learn financial literacy immediately put what they’ve learned into practice.
For instance, a survey that was carried out in 2016 by our Ramsey Solutions Research Team found that nearly two out of every three high school students who had taken a personal finance class reported that they were already earning an average of $3,000 per year. These students had taken the course.
The same group said that a large majority of them were accustomed to making budgets for their money each month. Additionally, 20% already lil durk net worth owned a vehicle that they had purchased for themselves! Because of this, the fundamentals of personal finance ought to be taught in all high schools, alongside other fundamentals like reading and math.
What is covered in a curriculum for financial literacy?
It’s critical to give the next generation control over their finances and teach them how to do so effectively. We want our children to beat the statistics on debt! However, practically speaking, how do we achieve that?
Fortunately, personal finance is 80% behavior and 20% knowledge. Therefore, it is more important to provide students with an actionable plan for managing their personal finances than it is to teach lessons about money in a financial literacy course. That’s exactly what the Five Foundations are: a straightforward plan made to assist students in managing their finances with confidence. The process is as follows:
The Initial Basis: Create an emergency fund of $500.
Students should begin by saving money for unexpected expenses. If students don’t have any money saved, financial emergencies like a lost phone or a flat tire could put them in debt. But if they have an emergency fund in place, big issues become minor inconveniences.
The second pillar: Get out of debt and keep it off.
Debt is foolish! Too many people are burdened by this enormous financial burden. Rewards in cash back, airline points, low down payments, and no down payment are all empty promises. Students learn in our financial literacy class how debt traps them and how to get out as soon as possible.
The third pillar: Get your car with cash.
After just five years, new automobiles are only worth 40% of their purchase price. It is not a wise investment to make the minimum monthly payment and pay interest on something that is losing value. The best option for a student is to buy a reliable used car with cash. Yes, it is doable! It requires advance planning and saving, but it is far superior to paying $563 per month for the “new” car they bought a year ago. It probably no longer smells as fresh!
The Fourth Funding Source: Pay for college with cash.
America’s student loan crisis is out of control. The total amount owed on student loans in the United States is $1.56 trillion. Trillion! Graduates today are not saving for retirement and delaying marriage. In addition, the debt that binds them in the past prevents them from leaving their parents’ homes. On the other hand, cash-paying students can freely enter the next phase of their lives.
The Fifth Reliance: Give and make money.
Now comes the fun part! Students who are free of debt and disciplined savers can truly live and give like no other. Time, patience, and a little bit of compound interest are required for this. However, just try to picture how different one’s life will be once they no longer have to worry about money. They can enjoy their money and spend their time thinking of ways to help other people rather than being consumed by financial anxiety and stress.
A student who is financially literate does more than just use their money wisely. They develop healthy habits that spread to their families, communities, and ultimately the nation. That is a trend that will alter the unhealthy culture of money and establish a new standard. Additionally, it occurs one student at a time.
Before they graduate, think about how much of a head start your child could get in life if they were already budgeting, saving frequently, and spending wisely! They might have a paid-for car, thousands of dollars in savings, and the beginnings of a retirement fund.
That isn’t just a dream, either! Our Foundations in Personal Finance course equips thousands of students with financial literacy skills each year. They discover the resources they require to construct a lifetime of financial success. Foundations make complex subjects like insurance, taxes, real estate, and the global economy more understandable so that students can confidently enter the next phase of their lives.