Life after high school can be a challenge in itself. There is the idea of being on your own for the first time without mom or dad to guide you, the excitement of moving away from home to attend college, starting your career, and many other factors that can make life after graduation both an exciting new time and also a time of nervousness.
There are many responsibilities that young adults will experience for the first time; such as having to buy and prepare food for themselves, waking up on time for work or school, paying rent, bills, keeping a financial budget and more. For many young adults, it is the first time in their lives that they are solely responsible for their finances. So how well do we as a nation prepare our kids to be ready for adulthood? It may depend on where they are from – literally.
Teaching Financial Literacy
Although many of the habits and practices we learn come from our parents teaching us, society and schooling also lend to our decisions and lifestyles as adults. In a recent CNN Money article, The Center for Financial Literacy at Champlain College completed a report assessing each of our 50 states and assigned them a grade (A-F) based on the financial literacy of the students graduating high school. The grading was based primarily on reviews of state legislation going back more than ten years, along with published reports covering state-by-state statistics.
So how well did the United States do according to this report? Sadly, not so well. Only 7 states received an “A” for their standards of teaching financial education, while 14 received a “B”, 8 received a “C”, 10 states earned a “D” and 11 states came in earning an “F” for their efforts, or lack thereof.
Of the states that received the highest marks, the majority of them have high standards and requirements of the schools when it comes to preparing the kids for their future. Most require at least one semester of a personal finance class along with passing a financial literacy test before a student is eligible to graduate. Many states begin economic education as early as kindergarten or offer special bank accounts for students.
Of the states that fall short of the grade, many of these elements are missing from the basic educational structure. Some are lacking any graduation requirements that include a financial literacy element, while others only offer such courses as elective classes that the student can choose to take instead of a language or art class. Many of these states have legislation at the state level that requires these financial literacy programs to be taught in the school while lacking the enforcement at the local school district level.
There are many benefits to implementing these finance courses into the school system at all levels. When introduced at an elementary school level, it teaches kids at an early age the value of saving their money. They can begin to comprehend the basics of personal finance and budgeting which will be applied throughout the rest of their life. At the Junior and Senior High levels, more detailed and in-depth education gives students the awareness and concepts needed to be financially secure and prepared for their futures.
The concept of financial literacy in education teaches more than just the standard economics or government courses that most schools require for students to pass before they graduate but rather incorporates the ideas and fundamentals of finance in many other areas throughout a child’s K-12 journey. It expands the concept and develops ways to include it in other areas of study such as social studies or math classes while also giving students practical knowledge for applying the information beginning with the first time they earn an allowance.
The Language of Finances
“Financial literacy is like a language. Learning is so much easier when kids start young and build up that knowledge year by year. By the time they get to high school, they’re fluent,” says John Rogers, CEO of Ariel Investment and co-founder of Chicago’s Ariel Community Academy. This school is one of many educational projects started by Rogers which targets children and minorities, where finance lessons start in kindergarten, and Jr High students manage real investment portfolios.
Perhaps having a school dedicated to financial literacy is extreme, however, given the current state of our national budget and the issues that surround the shortfalls, it is clear that more needs to be done to educate our nation’s youth. These students are our nation’s future leaders and it is important for them to be well versed in the language of finance.
With nearly half of the states in the US falling below average, earning either a “D” or “F” grade in financial literacy, we are sure to find our great nation in further economic turmoil in the future. The local and state officials that we elect into office may be the only ones who can help to make the needed change.
“Given that our nation has suffered greatly in recent years from financial illiteracy, elected officials should listen closely,” says John Pelletier, the director of The Center for Financial Literacy which released the report.
Although all education begins in the home, when it comes to ensuring that our nation’s youth are fully prepared to face the hardships of adulthood, public education plays a large role in it as well. Contacting your local legislation may be the best way to help your state and your student earn a passing grade in financial responsibility.