There are many concerns about the upcoming generation and money management. Sure, many ideas are bouncing around about how to fix the issues. The forthcoming political race is focused around at least a few of these ideas.
With debt crippling the working class and at an all-time high, many feel that it is time for the federal government to jump it and fix it. The country may be divided on these issues, but there is something that many of us feel should be a bipartisan solution; practical life skills taught in schools. This may not be a hot topic in the political arena, but it should be. Here are a few reasons why.
No Education Leads to Bad Choices
Looking into the statistics on money management skills in college students, many would be shocked by the numbers. Nearly two-thirds of college students can’t pass a financial literacy test. What is more, most students don’t understand their student loans, credit cards, and what credit means to their future. Although these numbers are disconcerting, we shouldn’t be shocked by them.
Middle school and high school education is focused on math, science, literature, and social studies and shies away from the practical uses of these subjects. Meaning students have to learn about loans on their own and usually from a quick Google search right before they sign for one.
Teaching Students About Money Means a Stronger Economy
What advice would you give to your younger self? Learn about credit and build up your score young? Perhaps you would about explain taxes, mortgages, and saving early for retirement. With hindsight being 20/20, many of us would love to go back and make changes to our understanding of money and debt. Most college students and even those entering the workforce lack an understanding of the basics of building stability.
The lack of financial planning has caused many people to put off milestones such as buying a car, a house, or building up their savings. This means that the economy suffers. We have all heard that Millennials are killing industries such as the housing market and the automotive industry. This may be due to a lack of knowledge about how finances work.
A Better Understanding of Money Would Mean Solutions are Implemented Earlier
One of the most significant drawbacks of a lack of practical skills means that most people don’t understand how to get themselves out of the hole. By teaching students about finances, they will understand when to reach for a solution.
The average university student has our credit cars on top of their student loans. By receiving an education in financial awareness, they will be able to know when to talk to a financial expert about consolidation, or how to budget accordingly.
It is Time We Did Something
The importance of saving for retirement, having a rainy day fund, and if a mortgage loan is cheaper than renting is something most students have to learn the hard way, and frequently too late. Setting the next generation up for success means starting in the classroom with a practical life skills course. It is not just vital for the success of the next generation but also for the health of our economy.