Why Personal Finance Should Be Taught In Schools
If there’s one thing that most people learn right away, it’s the fact that money affects everything. The famous line, “money makes the world go round,” makes a lot of sense. However, there are still a lot of pf people who lack the knowledge of the workings of personal finance, even until they already had a job and are managing their expenses. This is because schools don’t give lessons on the basics of money, leaving people to figure out taxes, mortgages, superannuation, and investing on their own. This being said, the younger generations should be equipped with basic financial lessons to prepare them to take the adult financial world.
Early Budgeting and Finance Lessons for Students
Personal finance is a vital aspect of building a better relationship with money in the future. Below are a few reasons why students should be given lessons on personal finance early at school.
- Weak Financial Literacy Has Negative Result
For adults, stress and other problems seem to revolve around money. At several points in your life, you encounter unforeseen financial problems that will weigh down your finances. To simply say it, everyone will face a financial hurdle along the way, especially when dealing with debts. It is almost inevitable with mortgages, car loans, credit cards, personal loans and the likes. However, this gets even worse if you don’t fully understand all the consequences of financial management since you can get stuck on a web of debts. Furthermore, no matter how much you work, it will feel as if you aren’t earning any actual money to tack away for emergencies. Stress is just a starting point, but money problems can affect your health and mental wellbeing, as well as your relationship with other people. Many of these problems can be avoided with proper education and early awareness. When it comes to finances, the sooner your children learn about it, the better.
- Parents Aren’t Always Trustworthy Sources
The things that school couldn’t teach you or the advice that you couldn’t get from your friends are all accessible to your parents. They are an amazing source of knowledge, especially when talking about personal finance since they’ve already experienced it for how many years. However, they are also capable of showing negative financial habits to you, which can result in misinformation. But this doesn’t point out that all parents are unqualified to teach their young ones about personal finance, it’s just that there are parents that don’t have the capability. This is why for education, schools are the best source since they teach kids factual information from reliable sources. The sources they distribute are also complete and updated. Sending kids to school and teaching them money management is the perfect way to equip them with powerful financial literacy, not just depending on parents to deal with the burden on their own.
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Students Usually Transition From School to Debt
Due to higher education, learning and understanding personal finance is strongly more important to students compared to before. For many teenagers, pushing through their education is a natural and usually mandatory development towards achieving a career in the future. However, qualifications aren’t affordable. Student loans are now raised to $2.9 million! If you calculate it, students need to spend 9 years paying off their student loans.
That’s an extremely long period to deal with the burden of having debt. Though there are limited alternatives to student loans, many students don’t completely understand the entire consequences of getting a loan. Learn about the differences between using a broker and getting a no broker loan, as it can help clarify and make the process of borrowing easier. Learning about debt, the various ways on how to repay things, and the terms of loan repayment – can greatly assist students in making wise decisions about their finances and future.
- Financial Freedom Leads to Healthier Life
Financial freedom and stability are often linked to better physical and mental health. Several studies have shown that personal finances are the primary source of stress for most people. Aside from this, anxiety and stress can also affect one’s mood, sleep, and blood pressure. On the bright side, learning and understanding how to effectively manage finances can result in a healthier life. Aside from this, less debt and more money are great for the economy as well. Having proper financial education can assist in decreasing financial stress in the future. This being said, the following should be taught to kids in school:
- Investment and wealth-building strategies
- Budgeting and money management
- The basics of ‘credit’ and how it can affect one’s ability to earn a job, access finance, and rent a property
- Good saving habits
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As early as possible, children should be well-versed with lessons in money management and personal finances. This will help them develop positive financial habits that they can use in the future.