Eventually every adult must take responsibility for his or her financial health. Personal budgeting may be as simple as spending no more than you earn, but can also involve the sound management of debt and careful investing.
While money management is an essential skill, few receive a financial education in high school. Since those who do receive one have a greater chance of achieving financial stability, there have been calls for required financial instruction before graduation.
Financial Instruction Leads to Better Outcomes
As CNBC reported in January 2016, the requirement for financial education in high school varies widely from state to state. Those with the toughest standards—Idaho, Georgia and Texas—resulted in improved outcomes for students. Credit scores for 18- to 22-year-olds increased in all three states after the education was implemented.
Learning at Home Isn’t Enough
Personal finance instruction has often been left to parents to pass on to their children. In reality, moms and dads can struggle with financial literacy as much as their children. Many families have high consumer debt and adults graduate from post-secondary education with heavy student loan burdens.
It can be difficult for parents to achieve sufficient proficiency in financial health to pass on to their children when they themselves never learned the fundamentals. Often, just learning finance-specific math, such as amortization and compound interest, can assist students. They are, after all, soon likely to get their first car loan and should have the tools to understand the full cost of that expense.
According to an October, 2015, CBC article, teachers in the Canadian province of Ontario are mandated to include financial literacy while teaching other subjects. A line from Shakespeare that refers to borrowers and lenders might be addressed from a modern personal finance perspective, for example.
Financial Instruction Should Not Be an Afterthought
But some educators fear this fails to address the core issue of money management education needed for financial decisions with real life consequences. When it is taught, financial literacy instruction may be on an ad hoc basis that fails to be comprehensive enough for long-term planning.
Educators often struggle with developing a high school curriculum which covers the fundamentals of science, mathematics and social studies that offer students the grounding to be productive adults. Financial education, if required, would have to bump another subject or create more work for an already overburdened education system and student body. But the benefits for students may lend credibility to the idea that the bank statement should have a place in the high school classroom.
Students, parents, educators! What do you think about adding financial education to high school curriculum? Share your thoughts with us in the comment section below!
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