At a time when pertinent information is more accessible than ever before, it seems as though our nation’s financial literacy has never been more inadequate. After all, our collective credit card debt has broken records, surpassing $1 trillion at the end of 2017. Meanwhile, younger generations are struggling under the weight of student loan debt, and upwards of 25 percent of the millennial generation does not know what purpose a credit score serves.
This inadequate knowledge of financial best practices, in conjunction with Americans’ propensity to live outside of their means, has the ability to cripple generation after generation. Therefore, it is imperative that we demand that better resources be made available to those who need it the most, whether that be in the form of classes offered in elementary, middle, and high school, or promoting the plethora of self-help materials that can be found online.
Either way, let us examine the potential outcomes of improved financial literacy curriculum.
It is no secret Americans are abysmal at planning and saving for retirement, as they often underestimate the amount of money they need to carry them through, and even bring their poor financial habits into, their golden years. However, improved financial literacy curriculum could put an end to these patterns before they can take root in younger generations, thus enabling them to adopt a big-picture mindset and put an emphasis on the importance of financial stability.
Teaching children and young adults how to effectively manage their finances will hopefully aid them discerning between when it is appropriate to utilize a credit card and when it is not. For instance, it is wiser to opt for 18-month financing for a large purchase, say a new appliance or expensive car repair, than it is to open a store card to purchase new clothing.
Additionally, delving more into the topic of credit card debt could instill in students the importance of checking their credit scores, and avoiding mistakes like making late payments, opening too many lines of credit in a short period of time, and completely maxing out one or more cards. Finally, such an education could reinforce the idea that one should not make a purchase they cannot pay off immediately, or at least before the balance begins accruing interest.
Nearly everyone enjoys having money on some level, yet most do not want to be bothered with the arduous task of tracking and managing it. This could be because they simply view the task as arduous, or because they do not have a firm understanding of effective money management tactics and therefore become frustrated. Regardless, introducing financial literacy courses at a young age could eliminate any confusion, introducing simple and time-saving strategies that eliminate confusion and promote proactive habits like tracking one’s spending, monitoring their credit score, and saving for the future.
Evidently, introducing and constantly improving a financial literacy curriculum could make a major impact not only on younger generations, but on those who wish to acquire financial stability as well. Now, let us hope it is just a matter of time, and using our voices, to secure a stronger financial future for all.