Money affects nearly every aspect of our lives, from obtaining healthcare to turning the lights on in the morning. However, despite its essential role, according to Next Gen Personal Finance, less than 25% of high school students who graduated in the spring of 2022 took a stand-alone personal finance course. While what we learn in school develops our critical thinking–which is vital–much of it may not have direct pragmatic applications in our lives. Teaching financial literacy in the classroom would be a game changer, having an immense, immediate, and positive impact on our financial security and sense of wellbeing. Financial literacy is about empowering through topics such as learning how compound interest can be a double edged sword and why opening a Roth IRA at an early age can lead to a very happy future self. The purpose of school is to teach us skills for future success, yet most well-educated students enter college without exposure to foundational topics like taxes, budgeting, and insurance.
The pandemic underscored the vital importance of financial education. As millions of Americans faced unexpected layoffs and found themselves in dire financial straits, nearly six in ten were poised to run out of emergency savings in 2020, according to CNBC. The pandemic magnified the alarming wealth chasm in the United States. Social injustice and economic disparity are inextricably linked. The wealth gap has far reaching implications, manifesting in a gamut of areas including lack of access to educational resources and inadequate healthcare. Many of the socioeconomically disadvantaged lack access to critical information and educational resources that would empower them to climb the social and economic ladder. In schools where more than 75% of students are eligible for free or reduced lunch, only one in twenty students were guaranteed access to a standalone personal finance course prior to graduation. In this way, the pernicious cycle of disparity is perpetuated.
It is our responsibility to break this cycle. Personal finance is a matter of social justice and equality. By teaching students how to manage their money, we teach them that they have the power to control their financial resources, concomitantly shape their futures, and rise up. And while financial literacy is not a panacea, it’s a key tool to leveling the playing field.
One of the main sources of stress in Americans’ lives is money. In fact, according to CNBC 90% of Americans are stressed about money. The conversation about money must change. Our generation needs to view money as a tool and source of opportunity. When most people think about money, they think about material things they can buy. However, money is so much more than a means of acquisition. It can provide a roadmap to financial security. Learning about personal finance early on prevents costly mistakes down the road.
Financial education is more important than ever. Gen Z cannot rely on pension funds or Social Security. The government has over 31 trillion dollars in debt, according to the New York Times. We must take charge of our own futures.
More than ever, our world needs capable, informed citizens and leaders. Our generation faces significant issues ranging from economic inequality and the wealth gap to climate change and gun violence, yet the American education system fails to equip students with the practical skills that we need most. While our generation cares about social issues and is channeling our collective power for advocacy, school curriculums are predominantly leaving us unprepared for the real world.
What can we do about it? I propose that all students have guaranteed access to a stand-alone semester-long personal finance course. This course will empower students through topics like budgeting, credit, investing, buying a car, and insurance. Getting to the point where all fifty states offer every student guaranteed access to a personal finance course is vital for the future of our society. Learning about personal finance is as or even more important than learning about European history or the War of 1812. Successfully managing your money means you control your finances rather than being controlled by them. The United States has always prided itself on its ability to foster upward mobility and equal opportunity for all. It is time to level the financial playing field.