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Short essay on ways of increasing financial literacy
Short essay on ways of increasing financial literacy
Short essay on ways of increasing financial literacy
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Schooling is meant to educate and train students for wherever we are headed next in our lives. Some critical subjects for everyday adult life are missed though. Many educators are seeing major gaps in education when it comes to personal finance. Many adults can benefit from finance education in high school with skills in personal finance, how to avoid debt, applying that information in their daily lives, and learn how their children can be taught further in school. Many people out there in the real world do not have much of an understanding of personal finance from not being taught about it. K-12 education has frequently skipped personal finance until recent years. Alison DeNisco, a graduate from Columbia University with a masters in journalism, …show more content…
Without basic knowledge on topics such as loans and insurance, students will be like fish out of water. Many Americans with a lack of financial knowledge have found themselves in …show more content…
Sharon Tennyson, a professor and director of the Cornell Institute for Public Affairs, wrote an article titled “Consumers' Insurance Literacy: Evidence from Survey Data.” Major purchases such as insurance make up a large amount of household expenses. As quoted by Tennyson, “‘The National Association of Insurance Commissioners (NAIC) calculates that insurance is one of the largest consumer expenditures for many families, with an average family spending over $7,000 per year for auto, home, life, and health insurance’ (Iuppa, 2006).” When consumers have more knowledge of insurance, they can be more confident in their purchases. As stated by Tennyson, “At the individual level, the study finds that there is a positive relationship between insurance knowledge and confidence in decisions.” With the potential benefits of financial education in high school, there are ways it can be further integrated into our education
Once high school ends, most students progress to college after a year or two from graduation. Due to all of the expenses for textbooks and etc., the student might realize that they don’t comprehend what to conserve or spend their money on to get through their years of college which will leave them clueless on what to do next. With situations like this that might occur, all high school students should take a financial literacy class as part of the mandatory course in order to get a diploma. With a numerous amount of students not having enough knowledge about how to manage their money carefully, presumably they’ll have trouble living their life as an adult. Taking a financial literacy class would help students stay out of debt, they’ll be prepared for their future, and they would recognize the discrepancies between wants and needs.
Most kids that have graduated high school have never been educated on the subject of personal finance, so they don’t know things like how to pay bills, or even how to do something as simple as applying for a job. According to a family friend of mine, Ron Hart; who happens to also be an award-wining author and TV/radio commentator, believes that students in high school don’t learn anything about how to get a job or get prepared financially. He states that, “ Students should prepare for a job. Maybe, instead of taking a fifth field trip to the Trail of Tears site, do one to learn about real jobs in an area they might want.” Hart believes that most basic high schools aren’t teaching students how to become financially stable for their future, which can cause major issues. He claims that “few schools teach about the value of hard work, ingenuity, gumption and entrepreneurship. Those lessons are as rare as Donald Trump bumper stickers in the faculty parking lot.” Hart also goes on to talk about how high school does not prepare you for life the same way college will. There are so many more lessons to learn there that people are missing out on. College is very important due to the fact that it will teach students more skills about finance and job seeking that most high schools don’t. In college, kids will learn how to save and budget their money, pay for their own expenses, and prioritize their needs verses their wants. Learning financial responsibility is also something that kids will carry with them throughout their jobs and their life. Having more freedom to understand the concepts of person finance will allow students to make mature decisions while easing their way into real world
In recent years, there has been a tremendous increase in student enrollment in higher education after high school effecting the need for financial aid for all students. Education has become a growing part in America where more students want to better their lives with a college education. However, the cost of college tuition has increased and more students find themselves struggling to pay off the enormous tuition rates. In a recent study by the Consumer Financial Protection Bureau, student debt has reached $1 trillion in federal loan debt. Student loan debt has crippled the economy and students are struggling to pay off federal loans. In order to help students with the high tuition rates of college the government and universities offer
Public education could have done a better job promoting what happens at 17 or 18 when graduating. We were briefly advised to go to college or go into the workforce to become employees. As students, we had been told college makes you more money, and that we were all encouraged to apply. I doubted the majority of students took the responsibility to look at costs of college, tuition, and housing and understand the loans and how long it would take to pay them off. It felt that we hadn’t been taught the value of money, only that we needed to make a lot of it. I had been fortunate for working in a bank my high school years that I had understood more than others about loans, rates, mortgages, and credit cards. The financial aspect of life after high school was rarely brought
When thinking about college the same fear is established in just about every student’s mind. How am I going to pay for college? With an increase in college tuition in the past ten years, that question has become more frequent. Whether it is a private or public institution, the price is still no pocket change and how to pay for it has become harder and harder to accomplish. In today’s society, the average person can not get as far as they’d hope without a college education. With that accomplishment of receiving a college education, comes the dreaded loans that some students have and pass on to their children.
As college students now, we know how important it is to know about how to avoid debts because many of us are or will rely on student loans to get through our higher education. Champlain College’s Center for Financial Literacy used national data to grade each state in the United States on how much effort is put into providing financial literacy for their high school students. Based on the information gathered in 2015 only 5 states obtained a letter A grade on their financial literary education; these states are Utah, Missouri, Tennessee, Alabama, and Virginia. These states require their students to take between half a year to a whole year of a either general financial literacy or personal finance. It is unclear how the student achievement is measured after taking these courses, but the resources to learn about what to expect are provided and are required to be able to graduate from high school, which cannot be said about all other 45 states in our country. 11 of the states were given a letter F grade, including our beloved California. These states do not offer finance classes alone or embedded into other courses. Although the achievement of students who take these courses is not exactly measured after graduating it is still significant information for them to carry with them into their adulthood. Many high school graduates will enroll in a community college or a 4-year university and will be targeted by credit card companies because they lack the knowledge on how important credit is and how to avoid debts. This is not only a worry shared by the graduating students but by the parents as well. MasterCard gave a survey to its cardholder members and 64 percent of these adults said they were worried that their
One might say there is a strong argument for the requirement of financial literacy for students in America. Americans continue to have increased balances on their credit cards as well as show a continued increase in bankruptcy filings according to statistics. Even the “baby boomer” generation is no longer exempt from financial hardships, as their generation has recently taken the title of “Fastest Growing Bankruptcy Demographic” from the 25 – 34 year olds (Linfield, 2011). Would it not make sense to say that Americans need to learn how to budget and borrow more wisely? Would not the best place to start be in schools? Well, the answer to that question is not a simple one.
In the context of how the system works, the only conclusion to accurately draw is that the odds are effectively stacked up against the college student of average means, especially considering the rise of lending organizations like Sallie Mae and the fall of Consumer protections (Collinge 4-5). Since the advent of the GI Bill and the understanding of the common virtue of education in the post-WWII era of the U.S. the message behind the collegiate experience has gone full circle. Since the 1970’s, with the continual amendments to the Higher Education act, lending companies have only become more powerful, enacting “draconian collection” strategies while simultaneously subtracting seemingly all consumer protections including bankruptcy protections, statues of limitations and refinancing rights (Collinge 4.) All of these factors make the modern student loan complex “an inescapable and profitable...
The cost of college can be a downfall for several people; however, Mead believes that “college is a route to economic advancement.”(Mead) Students should not be discouraged at how much college tuition is because a higher education can increase one’s chance of success. In the article written by the Kiplinger 's Personal Finance Magazine, “How to Invest for College,” there is a brief discussion on the best ways to invest for college. According to the article “How to Invest for College,” the article suggests that starting a fund for a child when they are in elementary school is the best way to
Today’s college students are bombarded with ads, commercials and mailings telling us that we need to spend money to be happy. At the same time, many of us come to college very ill-equipped to handle our finances. Financial literacy, defined as "the ability to use knowledge and skills to manage one's financial resources effectively for lifetime financial security," is important in our money matters as well as academic performance. Based on your understanding of financial literacy and experience (or lack thereof) of personal finance, 1) pick two personal finance topics (including but not limited to: credit cards, student loans, budgeting, saving, banking, and investment, etc.)
When a person decides to engage in a higher education, such as college, they can get a good job and that in it can make a credit score go up. Going to college, can provide the necessary job training, skill set, or characteristics a particular job may need. A person with experience or the skills will most likely be chosen for the job than a person who posses only one of those traits or neither. Securing ones future financially has become one of the main focuses of this world. Securing a person’s future not only affects their present but it allows room for mistakes in the future or for financial difficulties in the future. In the 1920’s when stock markets crashed and people who owed banks money could not pay them back, they lost jobs and even homes. If one advances his education they can get a job, become stable in that job, save, and therefore secure themselves for any downfalls or instability that may occur in the future. In this world today life is not easy. Everyone is either trying to become #1 or is already #1. Going to college will better a person’s probability of having financial future
Some schools have little money and few teachers and Matthew Yale said, “[T]he Department of Education’s next step is to work with districts and teachers and help them find the money they need” (Bernard 6). It will take parents to start this movement (Bernard 7) because parents have to be willing to give up more money so that their children know what to do with their money. Financial literacy courses can potentially make students overconfident about their skills and make them do even worse (Burns 8). Harvard Business School performed a study where it was concluded that financial literacy courses “weren’t effective in changing people’s financial decisions” (Burns 10). Thaler stated “A new paper by three business school professors … uses a technique called meta-analysis looking at results from 168 scientific studies of effects to teach people to be financially astute, or at least less clueless. The authors’ conclusions are clear: over all, financial education is laudable, but not particularly helpful” (13). The shows that financial literacy courses are good but they are not helping the youth as of now, so the right combination has not been found to teach the youth how to control their
One way our school could accomplish the goal of financial literacy education is creating a set class for high school students towards the end of their high school career. Offering classes in a curriculum that is set helps kids become better prepared for the real world. They receive a better understanding of what it is like having a great deal of responsibility, without the overwhelming of stress that comes with it since the class would be set in a classroom. According to the article written by Laura Langemo from Fox6 entitled “MPS Eighth-Graders Get a Lesson in Financial Literacy”, the Milwaukee Public School District Superintendent Gregory Thornton states, “We need [students] to be ready financially. We need them to be ready to step into the world and be able to actually navigate and manage money.” Students should feel confident after graduating that they will be capable of receiving such a great sense of responsibility. Teaching students about financial literacy at an older age throughout high school will allow them to be ready for their lives ahead. According to this article, many of the students were surprised with how bills amass in such a rapid pace. Similarly, the article from the Sandpiper by Edie Ellison includes information about being able to offer high school students classes in
In a Business Week article, Mr. Ben Steverman discuses issues facing today’s youth. The article is titles “Advice for Young Investors.” The article discuses two individuals who are 22 years of age, both are just beginning their careers. One individual is attempting to pay off student loans quickly and then save money to travel. The other individual is attempting to purchase real estate and invest within the market. Mr. Steverman discusses ten important factors for which young investors need to consider when approaching the market.