Americans’ debt has increased, led by mortgage, credit card and student loans. In the third quarter of 2023, household debt rose 1.3 percent. That brought the level to $17.29 trillion. Credit card debt for the average American household reached $7,951, and student loan debt for an individual in the third quarter of 2023 was $37,645. Bankruptcies were up 17 percent in the first half of 2023.
How did Americans reach this point? It all starts with teenagers. Although math, English, and humanities are taught, high schools often neglect personal finance. But that’s beginning to change. More and more states require personal finance to be incorporated into the curriculum.
Why Personal Finance for Teenagers
Personal finance knowledge is essential at any age. Knowledge is critical to managing finances and controlling debt.High school students are transitioning from children to young adults. Many have part-time jobs. They’re already dealing with income. High school is the perfect time to learn personal finance skills so students can make intelligent decisions about their money.
They can use their newfound knowledge in the real world. Learning and implementing it is the best way to solidify knowledge into practice.
Educating students before they take out student loans or acquire a credit card allows them to be proactive and avoid financial trouble.
When you understand you must pay a loan back or make more than the minimum payment on a credit card, smarter decisions will likely be made.
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8/23/2023
Those with little to no financial literacy are four times more likely to have difficulty making ends meet and nearly three times as likely to be debt-constrained.
States That Require Financial Literacy Courses
Pennsylvania is the latest state to require high school students to take a personal finance course before graduation. That brings the number of states that will be offering a dedicated semester-long personal finance course by 2028 to 25.There has been a 700 percent increase in states offering a personal finance course since 2013. In many of these states, finance courses are not required but rather are an elective.
Some states, however, require a dedicated personal finance course to graduate. These include:
- Alabama
- Iowa
- Mississippi
- Missouri
- Tennessee
- Utah
- Virginia
Some states, like Hawaii, include finance literacy in their K–12 standards.
States That Do Not Require Financial Literacy Courses
Three states do not require personal finance courses: Alaska, California, and Wyoming.Washington, D.C., also doesn’t require financial literacy courses.
Financial Literacy Curriculum
The National Council for Economic Education identifies six topics that should be covered in a personal finance course.- earning income
- spending
- saving
- investing
- managing credit
- managing risk
A personal finance course must cover banking, budgeting, taxes, insurance, paying for college, credit scores, and investing.
Learning to make thoughtful financial decisions, develop a plan and implement it should be the result of a personal finance class.
Money-Management Apps for Students
Another way to teach teenagers is through technology. Some schools have incorporated technology into their curriculum.A money-management app helps implement financial knowledge. Budgeting apps like Goodbudget use the old envelope system: setting pre-determined amounts into virtual envelopes for respective categories.
Goodbudget is a free app for up to 20 total envelopes and charges $8 a month for unlimited envelopes.
There’s a free financial education app, Zogo, that a student designed. It makes learning finances engaging with its gamified design. Users strive for first place, participate in daily trivia parties and earn rewards they can redeem for gift cards.
Zogo’s lessons span topics from learning how to save for college to basic investing and are aimed at high school and college students.
Since many young people are familiar with and fond of their smartphones, an app is sometimes the best way to reach them.
Financial Problems Start Young
Most financial problems people deal with start when they are young and make their first financial decisions.It often starts with student loans. Borrowing without analyzing the consequences can affect a person’s financial life. It can take years to recover. Taking on excessive debt at a young age can hurt short and long-term.
Failing to plan by not establishing an emergency fund or not learning to invest can put a person’s financial security at risk.
Personal finance education may not be the final answer, but it’s a start in giving young people the tools they need to navigate day-to-day and long-term finances.
Many states have realized that and are doing their part to provide the needed financial education.
The Epoch Times copyright © 2024. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
