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Helping Teens Grow Into Successful Adults With Personal Finance Knowledge

Posted: April 1, 2016 in Advice & Tips, Everyone, Financial Planning, Financial Planning, Ideas & Info for:, Topics, Your Money
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Dr. Martin Luther King, Jr. once said, “Education must enable a man to become more efficient, to achieve with increasing facility the legitimate goals of his life.” The function of education, he argued, is vital for the betterment of students’ lives and society as a whole.

As we continue to focus on the need for personal finance education, specifically as April marks Financial Literacy Month, it’s important to recognize its role in forming a well-rounded student. Because teens who lack a basic understanding of personal finance will grow into adults who are not equipped with the tools to lead financially stable lives.

The Proof

A 2012 study of nearly 30,000 teenagers from 18 countries found more than 1 in 6 students in the United States failed to reach the baseline level of proficiency in financial literacy, according to the Paris-based Organisation for Economic Co-operation and Development. That places American students in the middle of the pack worldwide.

Moreover, a 2016 survey from the Council for Economic Education reports only seven U.S. states require high school testing of personal finance concepts, with stagnation in mandates for personal finance education. Additionally, the number of states that require completion of economics courses is on the decline over the past two years.

The Results

In a 2015 national survey we found 42 percent of teenagers said they are not “financially fit,” and 2 in 5 teens would give up their smartphones if it meant graduating college debt free. A similar study in 2014 revealed 83 percent of teenagers do not keep a budget.

The juxtaposition of these statistics is stark. Teenagers show concern for the future of their financial health but aren’t taking the proper basic measures to set themselves up for success. With the continually rising costs of college education and a shortage of financial skills, young adults are greeted with shock upon leaving the confines of college campuses.

Seventy percent of college graduates, according to debt.org, leave school with student loan debt that in 2014 averaged $33,000. In total, U.S. student debt is around $1.2 trillion, with $3,000 of debt accrued each second.

The Solution

It all starts with the basics: personal finance education. Whether at school or at home, students should have the opportunity to learn practical life skills, like balancing a checkbook, the importance of saving early and saving often, and how investments can benefit from growth over time.

“To be successful, most kids don’t need to learn about collateralized debt instruments, but they do need to know how to open a bank account, how much they need to save each month to reach their goals and, if they borrow this amount of money, how much money they will need to earn to pay it back,” said Nan Morrison, president and CEO of the Council for Economic Education. ”

The Council for Economic Education found students who learn these basic financial literacy skills are more likely to engage in financially responsible behavior such as saving, budgeting and investing, and have better average credit scores and lower debt delinquency.

These are the skills the younger generation must possess because before we know it, they will be the ones who have the money and run the country. Don’t we want them to run it properly?

14 thoughts on “Helping Teens Grow Into Successful Adults With Personal Finance Knowledge

    1. Hi Sharon! Teachers can sign up their classes to participate. Talk to your grandchildren’s teachers about being involved in the next round of simulations.

  1. I love to proof read…organization is spelled wrong in the 1st paragraph under proof. Just sayin’. 😉

  2. Is there a way to become more active and help out by possible doing some in-class time for High School kids and their teachers to run through some of the material! Maybe H&R could build a school skills package and we can assist in education? Just a thought

  3. I agree with the previous comments. I would love to get involved with encouraging our schools/teachers to use this beneficial information provided by H&R BLOCK to better educate our students/children on financial security. Having “paper” information to approach our schools, especially math or economic teachers, would be appreciated so we could approach them with these ideas to implement in their classes.

  4. I am definitely on board with getting involved with a program to educate students and children on financial security. Brochures and hand outs would be a great way to approach boards of education as well as teachers with this idea. I would love to be able to do some class time as another post mentioned.

  5. I’m a mom, and I would like to be involved in helping students learn about financial health – looks like I’m in good company here, I see many posting how they too would like to give of their time to help students have a better future. I wish I had that when I was young, so maybe H&RBlock will offer it to the youth of today? We are here, and we want to help.
    –Love the articles you put out here, I save them and show them to my daughters (16 & 14). Thank You!

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