In grade school, high school and college, you are forced to take many classes on an array of subject matters. Anywhere from English, Math, Science, Foreign Language, and History. If you were lucky you may even be exposed to special courses such as art, music, health, home economics and trade classes. One thing that most of us were not exposed to are personal finances, meaning every day finances that a family deals with in a home. I personally think this would be a good idea to help men and women learn to do things from a financial perspective in a classroom that may appear to be common sense but aren’t.
What can be done?
Similar to a home economics class that teaches you how to cook and sew, or a woodshop class that teaches you to build things made out of wood, a financial 101 class should be introduced into high schools to teach students the essential financial tools of running a household. This class would be mandatory so students would not be surprised by the responsibilities involved in financing their lives and their family’s life when they are on their own. A recent study in Canada by LowestRates.ca showed that only 31% of millennials could pass a financial literacy test. Financial literacy simply means the ability to understand how money works in the world. This is disturbing.
There are many items that should be addressed in such a course. Kids need to be able to function in the real world. It would be ideal to teach information on mortgages, taxes, insurance, bank accounts, etc. These are all subjects that are addressed on a daily basis as an adult. All of us have been forced to figure it out, but wouldn’t it eliminate the unnecessary stress of starting off on your own?
How do you balance a checkbook? How do you make a budget? How can you begin to save money? What is a 401K? What do you need insurance for? How do you get insurance? What is involved in buying a new home? How do mortgages work? What is a loan? How do you get a credit card? How do you maintain good credit? What are taxes? How do you file and pay taxes?
All of these questions could be addressed and help today’s youth in understanding their financial situation better when they are on their own.