Carrying the Financial Load of Education
In the US, today’s high school students are thrown into a milieu of financial uncertainty. Looking backwards, these students have been coming of age in the years that follow the US housing crisis. After that crisis, what some now call the Great US Recession had its myriad effects on the households these students live in. Looking forward, job markets seem erratic, though the cost of higher education continues its steady growth. Dealing with major life decisions, like student loans, or with planning for a stable future with prospects of owning common assets — like houses and cars — seems unimaginably difficult for today’s high school students. Given these circumstances, educators are forced to face the difficult question: How is it possible to promote financial awareness amongst students already over-burdened with their academic load?
According to US News, most high school students are not able to manage their finances. Even though students are forced to engage with a diverse range of subjects, only 13 states require students to complete a personal finance course in order to graduate. When polling students about their desires to acquire personal finance skills, the majority of them express interest, especially when pinned against the prospect of future financial mistakes. Yet, the schools persist in focusing on the core requirements, especially language and math skills.
Given the potential interest in learning financial skills, teachers efforts to incorporate personal finance into their course curriculum would probably be met with open arms by students. According to Forbes reviewing a few basic financial concepts can dramatically improve students’ ability to understand and manage their personal finances. These are the core concepts, whose early introduction to students can majorly improve their financial skills:
- Budgeting
- Credit Cards
- Bank Accounts
- Savings
- Credit Scores
Unlike much of the details covered in most high school classes, these five concepts will hover over students for the rest of their adult lives. A simple conversation about these concepts, introducing for some and elaborating for others, could have transformative results for high school students’ abilities to project and then acquire future goals.
Moving beyond these core concepts, students could benefit from exposure to some raw economic data. For instance, the US Department of Labor offers reports showing yearly consumer expenditures. On the surface, these reports probably seem too boring to present to high schools students. Yet, extracting some simple numbers, like the amount of money most households spend on food each year, can help students begin to imagine the economic context they live in. One fun way to present the material could be allowing the students first to guess these statistics, and then slowly showing them how far or close they are to these recorded statistics. Overall, a part of entering adulthood is learning how much it costs for yourself, and those around you, to continue living according to certain standards. By keeping students in the dark about these costs parents and teachers could be doing them a disservice, perhaps even leading them to conceive of unrealistic goals as well as poor life planning.
Some schools are doing their students the favor of forcing them to begin taking these classes. Yet, with attempts to tackle the problem of developing financial skills, another problem emerges: Who can teach classes about personal finances. According to Business Insider:
“A study funded by the [National Financial Educators Council] found that 89% of teachers believe that personal finance should be a mandatory class, but only 20% believe that they could competently teach that class.”
Some may wonder if this gap between interest and ability on the part of the teachers causes the problem, or reflects the possibility that these teachers also suffer from the same problem. It’s as if we are stuck in the classic joke about the chicken and the egg: Who came first? Except in our case, it’s a matter of what came first? Poor personal finance skills, or an education system that doesn’t address personal finance skills?
Whatever the cause of students lacking personal finance skills, the more important conversation is how to change the situation. First, we need more students and parents to begin introducing financial concepts into students’ lives. Second, we need more conversations at the administrative level about making personal finance courses mandatory, and further developing them. Given today’s financial uncertainties, the best investment for the future is better preparing the next generation with financial skills that will enable them to better understand and organize their lives.
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