There are four essential financial skills that must be learned in life: opening a bank account, creating and maintaining credit, investing and saving for retirement. The problem is that these four essentials are rarely taught in school as part of critical skills, along with STEM and other subjects. However, this knowledge can pave the way for financial success and inclusion in later life.
Some kids occasionally face special gatherings centering on issues like how to save for college or why not spend everything you earned from your first job. Yet extensive financial education is not happening on a large scale – which is a big problem. According to a Forbes article, only 20% of people have someone in their life whom they trust to share money secrets. That’s a scary statistic.
However, this does not mean that financial education is not on the radar of some of the country’s leaders and politicians. According to a March 2022 survey by the Council for Economic Education, high school students in 23 states are required to attend a personal finance course, and high school students in 25 states are required to attend an economics course. On the reverse side of the currency, the three states and the District of Columbia do not include personal finances anywhere in their education standards.
Future financial literacy
Things might be looking up, though. As mentioned in a 2021 issue of The New York Times, more than 20 states are considering making financial literacy compulsory in their schools. In addition, Congress is making progress in increasing classroom financial education. Representative Matt Cartwright (D-PA) has introduced the HR 1547-Youth Financial Learning Act, which aims to provide grants to integrate financial literacy education in government primary and secondary schools.
Efforts are also being made at the state and local government levels. According to the National Conference of State Legislatures, 38 states have introduced new financial literacy laws in 2021. These are definitely steps in the right direction. And these steps are expected to be a positive start for the future of financial inclusion for everyone
Balanced personal budget: A goal worth pursuing
Today, millions of young people have learned how to manage their finances. Maybe they see parents or grandparents writing a check now and then. More likely, they don’t. So many people now manage most or all of their banking online. This means it is out of sight of children. So, they do not learn the ins and outs of these daily transactions with their eBank.
This change is needed. Many more, especially those from disadvantaged communities, have been left out of the mainstream financial system. Building a better life for their children and grandchildren will be more difficult if they cannot manage a transaction account or create a budget.
Indeed, building a strong financial literacy base is key to driving further financial inclusion. The more people get acquainted with financial system insights and the resources available to them, the better off they will be in actively improving their financial well-being.
Take access to fair and affordable credit, for example. Many people want to buy a car, own a house or have the capital to start a business. These big ideas can only happen if they have at least a modest idea of what an asset is and how to manage it properly.
Incomplete funding for the good of present and future generations
As a society, we already have many significant, courageous goals that we hope to achieve soon. Financial literacy should be ranked right there, and the best place to do it is in schools
What are the main benefits of weaving money management in K-12 curriculum? For one, bringing financial education into the classroom creates a life cycle of financial literacy. Kids who learn about money at an early age can build that basic knowledge and understand more as they get older.
Another advantage is that educators become smarter about their own financial decisions. Teaching our teachers to successfully navigate the mainstream financial system and to make themselves more financially literate stimulates their subject matter and helps children learn better.
An ultimate benefit is the long-term effects of making money mysterious on the whole family and even friends. Lessons that young people learn in the classroom can be passed on to their parents and peers. This will allow everyone to learn and demonstrate healthy habits together. It is a chain reaction that better prepares our communities to improve their financial health and well-being. As a result, it will lead to greater financial inclusion in the future.
Again, these positive results can quickly start in the classroom. Talking about money in primary, secondary school or high school should not be challenging for any school. It doesn’t even have to cost anything – which is a ridiculous bonus.
Below are some strategic ways for teachers and administrators interested in prioritizing financial literacy
1. Schools can form financial literacy partnerships with key players.
A school or school district doesn’t have to “go it alone” when it comes to money in the classroom. There are programs to share lots of big-time players in the financial sector, such as banks and mortgage lenders.
For example, take the Experian and Jump $ Tart coalition for personal financial literacy. The two organizations have been partners for many years. Together, they recognize and celebrate the value of financial education to increase financial inclusion across the community. Their work has provided teachers with information, tools and resources to educate all students, especially those who have historically been excluded from the mainstream financial system.
2. Teachers can find ways to incorporate meaning into everyday classroom conversation topics.
Opponents of financial education in some schools may say that it is easier said than done. They point to much more competitive priorities, less qualified teachers and a lack of time and resources. Of course, all of these are legitimate concerns. Yet when most people deal with money every day and rely on money to navigate every day, there is no reason to leave financial education on the sidelines.
Undoubtedly, it will be difficult to think of any other subject in school that may be concentrated in a single day or week. Teachers should be encouraged to talk about money in different ways. A history teacher can touch on how the government distributes their budget or collects taxes. A math assignment may involve a money element. Bringing money into the classroom is easier said than done. There are online resources like Jump ার্ট Tart Clearinghouse, where teachers, parents and even students can find effective, financial learning materials from a variety of sources.
3. School and after-school programs may host special financial guests.
To their credit, many schools invite financial leaders from their communities to the classroom. Great as teachers, visitors spice up the school day, and those professionals can talk about the multifaceted, complex aspects of money. Also, kids can ask questions and get ready answers from people who are already working in the field.
The problem is that often, the school and individual teachers have to go through several hoops to accommodate guest speakers and teachers. Perhaps the silver lining of the Kovid epidemic is our increased comfort through virtual communication, which makes it easier for local banks, credit bureaus, credit unions, investment firms, or nonprofits to talk to a class every 30 weeks for two minutes. Relevant means problem and answer the question. These small touch-points may not seem like much, but they add up over time, helping people become more financially literate and paving the way for future financial inclusion.
4. Teachers can follow financial services agencies and professionals on social media.
For even the most qualified personal finance teachers, trying to keep up with the ongoing developments in the financial field can be challenging. Unfortunately, many schools lack adequate funding for training programs and the limited preparation time teachers are given is not sufficient for self-directed learning. However, social media offers teachers an easy and inexpensive way to tap into the skills and trends in the financial sector.
Following financial experts on social media and programs like Experian’s #CreditChat, teachers gain access to insights, information, announcements and resources. The trick, though, is to make sure you’re following reputable organizations or reputable professionals instead of self-proclaimed experts and influencers.
A world of bright, confident money managers
At this point, the baseline financial knowledge of children and adults across the country could be even better. OppU’s research suggests that more than half of all adults are not worried about their finances, but more than three-quarters survive a paycheck later.
It doesn’t have to be this way forever.
Ensuring that young people understand money as early as possible will help them develop healthy resource mobilization and spending behaviors. As one of the leading societies across the planet, Americans must take action and bear the burden of helping children and adults make wise financial decisions.
Of course, there is a lot on the plate of the education system. Nonetheless, it will go a long way towards better financial inclusion, including educational information on finance and financial systems, changing the opportunities for everyone — and even changing the world.
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