Keeping our Youth Financially Literate

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In today’s fast-paced competitive economy, personal finance education should start early at both home and school. For high school graduates who choose to go on to higher education, personal finance education in college is often scant and few high schools in the United States offer the proper curriculum. Even fewer schools require personal finance instruction as a graduation requirement.

Regardless of when a young person’s formal education ends, they will be thrust into situations where they need to know how to manage living expenses. As a result, high school seems like the most critical and logical place to deliver financial literacy education to America’s youth.

With ever rising tuition costs, most college students are expected to borrow in order to finance their education. Most often do so without fully understanding how much debt is appropriate for their education or the connection between their area of study and the income level that they can expect upon graduation. Even worse, many students attend college without understanding financial aid, loans, debt, credit, inflation, or budgeting.

A recent study by the Financial Industry Regulatory Authority-Foundation Financial Capability Insights indicated that only 24 percent of millennials (ages 18 to 34) surveyed could answer four out of five questions correctly in a financial literacy quiz. The study found that “lower-income millennial households are much less likely to have retirement accounts, non-retirement investment accounts, and rainy day funds.”

Cynthia Thompson, assistant principal for Harlingen Early College High School, said financial literacy curriculum is in line with the district’s overall vision for graduation.

“It’s an important life skill and [Harlingen CISD] understands the importance of that and by the time students graduate from college, they’re better equipped to handle personal business financing,” said Thompson, who is part of the Curriculum and Assessment team at HCISD. The team focuses on providing curriculum based support through systemic collaboration designed to ensure educational excellence for all students. “It’s really about building students that are college and career ready.”

The Texas Education Code requires instruction in personal financial literacy in K-8 mathematics instruction and in one or more courses offered for high school graduation.  

Starting with the 2016-17 school year, each school district and open-enrollment charter school that offers a high school program must provide Personal Financial Literacy as a one-half credit high school social studies elective course.

The Advanced Technical Credit Program offered at HCISD high schools gives students a chance to receive credit at participating community colleges across Texas for taking certain enhanced technical courses during high school.

In addition to the new requirement at the high school level, HCISD is also working to broaden financial literacy education for the entire community. In recent years, HCISD has provided opportunities to learn about financial literacy through programs and community events such as the HCISD Financial Fitness Expo and the Annual Parental Involvement District-Wide Conference.

The purpose of these community events is to strengthen existing partnerships with community-based organizations and financial institutions like IBC Bank to educate high school students so when they leave, they have a better understanding of their finances.

“Based on personal experiences, if I had known then what I know now, I would have put more money away in investments and I would have started years ago,” said Thompson, who has children graduating from high school and college. “I definitely feel like this curriculum would have been very useful instead of having to learn from trial and error.”

We would not allow a young person to get in the driver’s seat of a car without requiring driver’s education, and yet we allow our youths to enter the complex financial world without much related education. The 2008 financial crisis that led to the most recent recession demonstrated that a lack of financial literacy was one of the factors that led to negative economic consequences in the United States.

The basics of personal financial planning needs to be taught both in school and at home. When students graduate, they should understand how credit works and know how to budget, save, and invest — for their sake and the financial future of our country.