Now Financial literacy should continue to be taught in schools
It’s no secret that many New Jerseyans of all ages are drowning in debt. Many are also not preparing properly for retirement, saving for college or able to buy a house. There are a hundred different reasons why this is happening, and the resulting horror stories are endless. However, a good percentage of these scenarios could be prevented if youngsters were exposed to basic financial literacy courses when they are school-aged.
Today, only 14 % of teens take personal finance classes in school nationwide. That’s just not adequate. Without school-provided financial education, our students are ill prepared for financial achievement once they achieve adulthood.
Last year, Wells Fargo conducted a survey that revealed only 5 percent of 18- to 21-year-olds are confident they will attain their financial objectives. The survey discovered that only 41 percent know what a credit score is; only 28 percent understand annual percentage rates; only 41 % understand the concept from the 401(K); and only 31 percent comprehend compound interest.
What these findings cry out to me is: We should reach young peoples whilst they are a captive audience — in school — to teach them some from the most essential life abilities they have to be productive with money basics.
Realizing the seriousness from the matter, the state of New Jersey is currently running a pilot project in some school districts, mandating that financial literacy be taught to high school students. And, starting with the 2010 freshman class, students will probably is required to complete a half-year financial literacy course so that you can graduate.
To complement the state’s efforts, Wells Fargo, in partnership with Newark’s East Side High College and the Atlantic City college district, has supplied training and materials to teachers who decided to make financial education a much more regular component of their classroom agenda. In fact, in Atlantic Town, we have trained two-thirds of its teachers in grades four to 12 on teaching financial literacy utilizing Hands on Banking (HOB), a non-commercial financial education curriculum developed by Wells Fargo. In partnership with teachers, HOB delivers the fundamentals of budgeting, saving, investing and using credit score responsibly. It could be accessed at handsonbanking.org/en/.
Money management is really a learned skill, like reading or riding a bicycle. We don’t just wake up one morning understanding APR, credit scores and 529 plans.
And these principles must be taught early to establish a foundation of healthy habits which will last a person’s lifetime. Without having this, young people simply discover themselves living beyond their means, overwhelmed by debt. The low credit score scores that result can affect their ability to buy a car, rent an apartment or even get a work.
To prepare our young people for job opportunities, we must focus on math and science education. However, there is another important requirement we need to consider: The people in some of these jobs should maintain strong credit score scores, especially those with the highest government clearances, or they risk losing their jobs.
If the rate of teens taking personal finance classes in school nationwide had been higher than 14 percent, we might be seeing a lot stronger economy these days. That deficiency has never been more obvious than throughout the past few years.
Because of the financial crisis, the economic landscape of our country has changed. Bankruptcies are on the rise. Unemployment and foreclosure rates are high. Small companies are struggling.
The pain of this time has also resulted in something good: It has caught people’s attention. We are now inside a moment when many people understand that knowing how you can manage their money is critical.
Inside a recent survey, more than three-quarters of college students wish they had been given more assist in preparing for their financial future.
Let’s give our kids what they need and what they deserve: strong personal money management abilities.