Why We Must Teach Financial Literacy In School
Few parents of students in grade school, high school or college would disagree if you said; we need to teach basic economics and financial literacy as mandatory parts of our education system, and yet, we don’t? Why – well, that was the question recently put forth at our think tank. What might we teach the kids?
How about how to balance a checkbook, how to calculate simple interest and amortization, and how about personal budgeting and credit card debt issues? How about the tradeoffs of student loans for college tuition – whoops? Is that one taboo – sorry, but why not, why should anything be off-limits. Let’s talk shall we.
You see, one think tank type agreed with me stating that he liked the principle and was amazed it wasn’t already part of the curriculum. Of course, he also told me that my ideas of ‘balancing a checkbook’ were a little archaic stating; “Seriously? How many people still use checks – haven’t written one this decade.”
Okay, I concede that point, still the principles of looking at a bank statement are of value. Interestingly enough, I’ve only written a handful of checks this year myself come to think of it.
Another couple of points – in the USA we see 1.3 Trillion Dollars in outstanding tuition debt – 40% over 90-days in the rears, most of those students will default eventually, worse either way they are economically enslaved as that debt cannot be discharged by bankruptcy, at least not yet, Democrats want to forgive and eventually give free college tuition, still those loans were taken out unwisely.
Another challenge Auto Loans, zero interest, zero payments until next year and loans to those who have very substandard credit, that’s another sign of bad decision making. What if those folks had better knowledge about interest, loans, and money?
When people took out ARM Home Loans during the run-up to the 2008 financial crisis, many said they didn’t understand what they were signing. Maybe they did, but used that as an excuse, either way, they should have known what they were signing and getting themselves into.
Why are we in such a hurry to economically enslave the next generation with debt? They get out of college and cannot buy a car, start a business, or buy a home, how does that help our economy moving forward? Something is amiss, and it is something that we can fix by simply teaching financial literacy, which is just as important for success in life as math, science, reading and writing. Please consider this.