What is Financial Literacy?
Millions of people in the United States struggle with managing their finances. With rising debt levels and stagnant incomes, few people are hopeful about the future.
Multiple studies indicate that Americans overestimate their financial literacy. Although some people believe they have a strong economic background, most people struggle with basic concepts.
Numerous schools across the country are adding financial literacy courses. These classes are designed to teach students basic financial principles. Teaching students about budgeting and investing is an excellent way to prepare students for the real world.
The average credit card debt per household has increased every year since 2010. As the economy improves, more people are comfortable borrowing money for the future. Credit cards generally have a high rate of interest. Some borrowers do not understand how bad it is financially to have a lot of credit card debt.
Financial literacy courses expose students to the dangers of high-interest debt. Although not everyone will listen, these classes will help some students avoid bad financial decisions.
Investing is critical for anyone who wants to build wealth. Most people wait until late in life to start investing. However, people who immediately begin funding retirement accounts have a massive advantage over people who wait until later in life.
Financial literacy courses taught in high school do not teach complicated investing subjects. Instead, the classes will focus on fundamental principles and how students can prepare themselves for the future.
There is growing political support to teach financial literacy in schools across the country. Some political leaders are even drafting a law that would make this class a requirement to graduate from high school.
As more Americans struggle with financial planning, it is clear there is a massive need for more education on this subject.