Why kids need to learn financial literacy


Twenty states across the country have bills requiring financial literacy to be taught as a separate course in elementary schools. And experts say it’s time.

Harold Abraham, elementary school principal and adjunct professor at Montclair State University, says financial literacy is so important it should be a part of every grade level.

“As educators, it is essential that we teach students how to save, earn, borrow, invest and protect their money intelligently. This will ensure that regardless of their journey, they will make sound financial decisions along the way,” says Abraham.

Educators discuss what’s covered in a financial literacy program and why it’s so important for kids to learn about money management and more.

With a focus on smart consumption, financial literacy classes teach kids how to build wealth and manage their finances. For example, students can learn how to create a budget and invest for retirement — skills not typically taught in a high school economics course.

But when it comes to financial literacy, every student’s journey will be different.

“As educators, it’s critical that we teach students how to save, earn, borrow, invest and protect their money wisely. This will ensure that no matter their journey, they make sound financial decisions along the way” , says Abraham, noting that financial literacy must be integrated into the curriculum at all grade levels.

Alicia Torres, director of the Learn and Earn program, an after-school program for youth in grades 11-12 offered by the nonprofit group RiseBoro Community Partnership, says many young people she works with lack the basics. basics of financial literacy – things as simple as budgeting or even opening a bank account.

“We provide these young people with academic support, work readiness training, college access, counseling and counseling, aftercare services, financial literacy, mentorship, leadership development and internship. been paid,” says Torres.

Understanding compound interest is an essential part of financial literacy, says Benjamin Caldarelli, co-founder of Princeton College Consulting, an education consulting firm. That means learning to assess the difference between good money (savings/investments) and bad money (borrowing/credit), he says.

“It’s exciting for kids to learn what the difference in their retirement savings would be if they started saving at 20 versus 25 versus 30,” Caldarelli says.

Also, understanding that most financially well-off people are not celebrities or well-known entrepreneurs, but rather everyday people who have invested with a solid strategy, can be stimulating and inspiring for children.

Finances are part of our daily lives, so financial literacy should be a required course in schools nationwide, Torres says. However, she says many young people who participate in Learn & Earn enter the program with little financial knowledge.

Regardless of economic status, every individual has the right to know how to manage their money and the differences and advantages of bank accounts, credit cards and credit scores, retirement funds, investments, loans, etc. .

We have a student loan debt problem as a society, Caldarelli says. Greater financial literacy can help students and their families appropriately assess college funding decisions – decisions that have the potential to affect an important part of their lives.

“For the individual, it is more difficult to get out of crushing debt, which makes it more difficult to buy a house, car and other goods and services, as well as marriage and foundation of a family. It hurts the economy because a whole,” says Caldarelli.

Financial literacy, both personal and public, is something every student needs to be a responsible citizen, Caldarelli says. “Personally, our financial security often depends on our ability to understand how money works for or against us. Publicly, as a voter, it is important to be informed enough to assess what government officials say and do. Some of our political divides are due to disagreements that don’t necessarily stem from ideology, but from different levels of financial literacy,” says Caldarelli.

Torres says that over the years, learning about the role finances play in their lives (and in their communities) has made all the difference for his students, whether their path is high school, employment, apprenticeship or the army.


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