Why Financial Education is Crucial in Today’s Schools

MUW Team

// July 6, 2023

Financial education, General

Introduction

Many people are surprised to learn that financial education isn’t mandatory in schools. That’s right: There is no federal law requiring schools to teach personal finance, although individual states can decide whether or not they want to require it. This means that many students graduate high school without ever having had a class on money management, which is unfortunate given how important it is to develop good money habits when you’re young—and how expensive bad ones can be. Parents and teachers need to play an active role in helping children develop good spending and saving habits early on so that they don’t have to deal with the consequences later in life. Here are some reasons why this is such an important issue today:

Financial Literacy Is Crucial in Today’s Schools

Financial literacy is important. It’s a skill, not a subject. Financial literacy is essential for personal and professional success, as well as life satisfaction. The good news? Financial literacy can be learned at any age–it’s a lifelong process!

Financial literacy is also an essential building block for other skills:

Math: You need math to understand money management, investing, and budgeting. If you’re not proficient in basic math (addition, subtraction), then you may struggle with some aspects of personal finance, such as saving or budgeting effectively for big purchases like cars or homes.

Reading comprehension: Financial documents such as credit card agreements often contain dense legal language that makes it difficult for people without strong reading comprehension skills to understand what they’re signing up for.

Communication skills: When talking about money matters with family members, friends, or coworkers who have different backgrounds than yours (for example, immigrants from another country), being able to communicate clearly about what your needs are will help avoid misunderstandings down the line

For example, if you have a friend who is married and has children and you’re not married or don’t have kids yet, they may think that they should give more money to their spouse than they can afford. If both parties are clear about their goals and priorities from the start, it’s easier to make decisions together that work for everyone.

Problem-solving skills: When you’re trying to figure out how to pay bills on time after losing a job or dealing with an unexpected expense like a car repair, it helps to know how

The importance of financial education begins at home.

The importance of financial education begins at home. Parents are the first teachers and role models for their children, so they should be teaching them about money from a young age.

Parents can start by teaching their kids how to save, spend, and use credit cards responsibly. They should also teach them about investing and retirement planning as soon as possible so that they’re prepared later in life when they’re on their own financially.

Finally, parents should teach their children about money management by setting a good example themselves. If you want your kids to learn how to manage their finances responsibly, then you need to set an example for them by being financially responsible yourself.

A lack of financial knowledge can increase risk in the workplace.

A lack of financial knowledge can increase risk in the workplace. Employees with poor financial skills are more likely to make bad decisions, take on debt and be unemployed.

Financial education is not just for personal finances; it’s also vital for our economy as a whole. A 2014 survey by the Financial Industry Regulatory Authority (FINRA) showed that only 1 in 5 workers said they receive formal training on how to manage their money or make sound investments at work–and fewer than half even discussed money management with their coworkers outside of office hours.

This is a big problem because financial literacy is a key factor in earning more money and improving your quality of life. The more you know about finances, the better equipped you are to make sensible decisions about how you spend and save money. If we want our economy to grow, we need every worker to be financially literate.

Financial education is needed to help students understand their rights and responsibilities as consumers, taxpayers, and investors. High school graduate who has not been taught about money management will likely struggle to manage their finances later in life.

Financial literacy is crucial for students who want to be successful in life after graduation. Financial literacy can help students make the right choices when it comes to managing their money and understanding credit cards or loans because they know how much something costs before purchasing it (and whether or not they can afford it).

For us all to live comfortably as adults, we need financial education so that we can make better decisions regarding our finances throughout life.