The Importance of Financial Literacy
By the time most students graduate from high school, they have little to no knowledge on how to handle their personal finances. Many people go straight from high school to the workforce and must learn to handle their own paycheck and begin dealing with big financial decisions, such as paying rent for an apartment, buy a car, and paying taxes. Even those who go to college must still deal with large financial decisions, such as taking out and repaying student loans and being away from their parents while also having the ability to spend their money however they want and open multiple credit cards.
Why don’t students understand the importance of personal financial literacy? This lack of knowledge is due to the fact that less than 20 schools require that students take any kind of financial literacy class during their high school careers; out of these schools, only 4 require that these classes are taken for an entire semester. Here are a few reasons why it’s important for young adults to be financially literate.
Reinforces financial responsibility
When students have the opportunity to learn financial literacy, it allows them to become more responsible, with their finances and in general. Students learn how to manage the money they earn and to avoid spending it all at once, because they realize there will be bills they must pay in the future.
Teaches important life skills
Everyone needs to understand how to open a bank account, pay their taxes, and take out and repay loans. Taking a single financial literacy class in high school can teach the basics of these skills and give students knowledge that will greatly benefit them later in life and help them avoid a heavy financial burden.
More successful in school
Young adults who have a basic understanding of finances are usually more successful in school because they understand the value of an education. They realize that if they’re more educated, they’ll be more likely to find a higher paying job, which leads to better financial opportunities.
Better personal success
When young adults have a rudimentary understanding of basic life skills, they succeed in life more quickly and easily than their peers who are not financially literate. Instead of taking valuable time to learn financial literacy and possibly making serious mistakes while learning, young adults who learn these skills in high school have a low-risk environment where they can familiarize themselves with financial skills and then achieve proficiency in these skills once they enter the real world.