Why Financial Literacy Matters For Our Kids
Understanding how to manage money is a crucial life skill, and the journey to financial responsibility begins early. Yet, one of the places we have failed as a society is preparing our students to be financially responsible. Since April is Financial Literacy month, this is a great time to reflect and see what we can do to improve the lives of our students and young adults as they enter the workforce.
The Case for Financial Literacy Education
Financial literacy empowers students to make more informed decisions and take control of their financial lives. By understanding concepts such as budgeting, debt management, saving, and investing, students are better equipped to make choices that match up with what they want in life. Without a solid grasp of financial literacy, it's like trying to navigate a maze blindfolded. You might stumble into some pretty sticky situations, like getting tangled up in high-interest debt right out of the gate when you start your career.
The Role of Schools and Educators
Educators play a pivotal role in equipping students with the necessary skills to navigate the complexities of personal finance. Integrating financial literacy into school curriculum is a crucial step toward helping our students. By incorporating financial literacy topics into various subjects or creating a curriculum focusing on financial basics, schools can ensure that students graduate with a solid understanding of financial concepts and principles.
Elementary School
Depending on the age, you can incorporate a bingo game with various coins and bills, teach students about adding and subtracting money or create a classroom economy with play money to let students purchase various prizes. These games help students become familiar with different coins and bills, reinforce addition and subtraction, and teach the value of earning and saving.
Middle School
In middle school you can start teaching about budgeting, banking, and encouraging entrepreneurial projects. You can have students create a monthly budget based on hypothetical income and expenses to prioritize needs over wants and how to make responsible financial decisions. Students may also have a bank account where they can learn how to open a checking or savings account, learn about interest and how to use an ATM. Encouraging students to create products they can sell also provides valuable lessons about budgeting, marketing, and customer service.
High School
Some ideas for high school students include a stock market game where students research and select investments to purchase and compete against other teams. You can also offer workshops on topics such as college financial aid, student loans, renting an apartment, and preparing for major life expenses. Teaching students about credit scores, loans, credit cards, and the consequences of debt are also important topics.
A Call to Action
By prioritizing financial education in schools, we can empower students to become financially responsible individuals capable of making informed decisions about their money. Ask your teachers or school board members about ways to incorporate financial awareness into the classrooms and help our students prepare for the future.
Authored by Stephen Blahovec and Michael Rausch of North River Wealth Advisors. We are an independent, fee-only financial planning and investment management firm located in Pittsburgh, PA servicing clients locally and across the country. To learn more, contact us here.
This content is developed by North River Wealth Advisors from sources believed to be providing accurate information. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.