The estimated reading time for this post is 464 seconds
In America, there is a massive knowledge gap America when it comes to personal finance. This article will explore the current state of financial education in America and propose a nationwide, mandatory course on personal finance.
According to Investopedia, Personal finance is defined as “the aspects of money management concerned with how you earn income, save, spend and invest your money. If you think about that definition in its totality, it’s pretty depressing: we aren’t teaching people to manage their money; instead, we expect them to learn everything independently. That means complete ignorance regarding budgeting and spending; total unawareness of interest rates and credit cards. Combine that lack of understanding of an increasingly electronic world for any information, and you get a population unaware of even the basics.
If you think about it more deeply, this isn’t just an American problem; instead, it’s a global problem. Think of all the cultures of the world that exist today. Now ask yourself how many of them provide their citizens with any personal finance education when they are children. If you guessed “few,” then you are correct! Whether in America or elsewhere in the world, most people are expected to learn everything on their own through trial and error. This approach creates problems for individuals when they are entirely unaware of negative interest rates on credit cards or why payday loans seem like a good idea until in life (not to mention the insane interest rates on those loans). This ignorance isn’t just a hindrance for individuals either; it is a problem for everyone. If we create generations of people who don’t understand how to manage money, guess what? We make generations of people who will spend as much as they have and borrow as much as possible because that sounds like a beautiful idea. The result? A massive load of debt that causes economic collapse… again.
Mandatory Personal Finance Education in Public Schools
To correct this issue, I propose a nationwide course on personal finance should be instituted in all public schools from first grade through twelfth grade. With the increasing popularity of homeschooling and other alternative educational programs, I think it’s essential to include these students too, so they have an equal opportunity at learning this information.
This proposal comes with several benefits. First, the simple act of teaching students about personal finance will help them understand money management. After all, this course would be just one more event that they can learn from to better prepare for their future lives. Second, if every student were given a basic understanding of handling credit cards and loans, there would be fewer defaults on these types of transactions because everyone would have an idea of what interest rates are like. Finally, it’s important to note that this course wouldn’t just benefit students financially; instead, it is also crucial for their social development! If kids are taught early on about the benefits of saving versus spending, they will be less irresponsible adults in the future.
This proposal faces a few major obstacles, though. First, there is the issue of cost: who will pay for this program? Will it come from local governments, or will other financial institutions help fund this initiative? Second, what kind of curriculum should be implemented to ensure that students across America receive a standardized education on money management? Finally, how can we ensure teachers have the training to teach these courses properly, maximizing their effectiveness and not leaving students confused? These questions could be solved through partnerships with outside organizations and giving schools more money to train their staff properly. In the end, the benefits outweigh the costs for this proposal, so each question must be carefully considered by policymakers to decide if this is indeed an initiative we want to undertake.
This initiative is significant for personal reasons, not just political or economic ones. I am a recent college graduate who was never taught anything about credit cards or loans when I was in school. My parents were unsure how best to handle these types of transactions and didn’t feel confident enough to teach me everything I would need to know (or they didn’t know themselves). As a result, my first encounter with credit cards and loans was when I started applying for jobs, and companies saw my lack of knowledge on the matter as a sign that I would default on payments. Because of their financial ignorance, I had some trouble finding work even though there were other candidates out there who were equally qualified (if not more so) who didn’t have a problem with their credit score… and you wonder where the American dream went?
To avoid this incredibly embarrassing situation from happening again, I believe students must be taught about these financial basics. In addition, if we can include information on entrepreneurship in these courses, too, then maybe we can encourage more people to take the risk of starting a business. After all, it’s almost impossible to get funding for your startup idea without knowing anything about loans and how they work! With some extensive knowledge of personal finance, anyone would significantly improve their economic future.
I know what you’re thinking: “do we need another class?” The answer is yes; at the very least, more information provides people with more options for handling their money. If some people want to take out loans while others prefer to use credit cards, more knowledge will allow them to make the best decisions. Plus, these types of courses would benefit anyone who wants to better manage their financial situation.
There are already several controversial topics in our nation’s courthouses right now, so why not add one additional issue? Besides, what makes this proposal any different from other areas of study? A student could learn about government without ever passing through the courtroom doors. However, they still choose to take that course because it’s interesting, and there are benefits associated with understanding the legal system. I believe the same is true for my proposal; everyone would learn something about personal finance even if they don’t intend to pursue it as a career.
Every child has dreams and aspirations of what they want to accomplish in life; no matter how big or small those dreams are, this initiative will ensure that students can achieve them quickly. Ultimately, I think that every public school student should be required to take at least one course on personal finance. If our students are better prepared to manage their money, they will succeed at whatever goal they set for themselves.
There is a lot of evidence to support the idea that personal finance courses will increase a person’s likelihood of success. A study published in the American Economic Review found that people with some financial knowledge were more likely to own homes and cars and have higher credit scores. Those who had no education on finances were less likely to run their own business or buy a home than those who had been educated! Additionally, they found this connection between money management skills and future success even accurate among low-income groups.
This initiative would make it easier for Americans to move up the social ladder by encouraging entrepreneurship in terms of economic benefits. This leads me to my next point; not only does this topic benefit our American citizens, but our economy as well. With more people starting their businesses, the country’s GDP would rise considerably, creating more jobs for everyone. More jobs mean more opportunities for the younger generation to find employment, which brings me back to my original point of why this idea would be beneficial. Personal finance education would enable anyone to increase their economic future without relying on someone else or taking out loans.
Looking at the many advantages of including personal finance courses in our public schools, I believe there should be a change in how we are currently educating our students. It seems ridiculous that after nearly 20 years of compulsory schooling, young adults are still not capable of making sound financial decisions. Teaching children about money management while still in school will only lead to positive consequences later. If you consider yourself an American patriot, you should support this initiative because it’s best for our children and the nation’s economy.
While we should adapt this same system to the other countries, I recognize that there are some differences between different systems and ours, so it might not be as relevant to them. Before you decide if this is a good idea or not, I encourage you to research how personal finance education works in your country or state because that will significantly influence your verdict on whether or not you agree with me.
In conclusion, requiring students to take courses on personal finance is necessary given the benefits it would bring about for everyone involved – students, parents, teachers, schools themselves – even the government! This knowledge will empower young adults to make better financial decisions, ultimately leading to a better future. Consequently, this is why I believe everyone should have to take at least one class on personal finance before they graduate high school.
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