Financial Literacy in Education: What Students Should Learn
Financial literacy is a crucial life skill that can help individuals make informed decisions about their finances and achieve financial stability. However, many high schools and colleges do not provide adequate education on financial topics, leaving students unprepared for the financial challenges they may face in adulthood. In this article, we will discuss what financial topics high schools and colleges should teach students and quote insights from two experts.
Budgeting and saving are highly essential skills for financial success. Students should learn how to create a budget, manage expenses, and save for short-term and long-term goals. According to Shannon Ryan, founder of The Heavy Purse, a financial education website for parents and children, “Budgeting and saving are the foundation of good financial management. Students should learn these skills early on, so they can develop healthy financial habits and avoid debt and financial stress in the future.”
Credit and debt are important concepts that students should thoroughly understand. Students should learn what it takes to build and maintain good credit, how to manage debt, and the consequences of defaulting on loans. According to Ted Halpern, founder of Halpern Financial, a financial planning firm, “Understanding credit and debt is crucial for making important financial decisions, such as buying a home or starting a business. Students should learn how credit scores are calculated and how to build and maintain good credit.”
Investing and retirement planning are important topics that are often overlooked in financial education. Students should learn about different investment options, the importance of diversification, how to save for emergencies and future expenses, and how to invest for long-term growth. According to Ryan, “Investing and retirement planning are important concepts that can help students build wealth and achieve financial independence. Students should learn how to invest wisely and plan for their retirement early on.”
Taxes and financial regulations are highly important aspects of financial literacy that students should understand. Students should also learn how taxes are calculated, how to file taxes and the consequences of tax evasion. Additionally, students should understand financial regulations, such as the importance of consumer protection and the role of government agencies in ensuring financial stability. According to Halpern, “Understanding taxes and financial regulations is crucial for navigating the complex financial landscape. Students should learn how to comply with tax laws and understand the role of government agencies in maintaining financial stability.”
Insurance is a critical component of financial planning. Students should be taught how to choose and purchase insurance policies, including health, auto, and home insurance. According to Dr. Ackermann, “Insurance is an essential tool for managing risk and protecting assets. Students should learn how to evaluate insurance policies and determine which policies are necessary for their financial situation.”
Financial literacy is a crucial life skill that can help individuals achieve financial stability and make informed financial decisions. High schools and colleges should prioritize teaching financial topics such as budgeting and saving, understanding credit and debt, investing and retirement planning, and taxes, insurance and financial regulations. By equipping students with these skills, they can develop healthy financial habits and make informed financial decisions that will benefit them throughout their lives. As Ryan stated, “Financial literacy is a gift that keeps on giving. The earlier students learn these skills, the better off they will be in the long run.”