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The 5 Financial Literacy Secrets Teens Need To Know

Why is personal finance important for young adults? Because it’s a life skill! All teens should have a foundation of personal finance before college.

Start Early!

As teenagers adopt to “common core” in their high school education, the learning standard is set, textbooks are the same, and all assignments are found online. Especially as technology arises, schoolwork is “easier,” and teens tend to go through the motions at school.

Transitioning from adolescence to adulthood, one of the most valuable skills they can acquire is financial literacy. A majority of high schools across the nation fund STEM classes (Science, Technology, Engineering, Mathematics). Nevertheless, personal finance classes are usually dismissed!

Personally, I did not take any finance classes until I entered college. However, looking back, I think it would have been very useful for developing a  foundation

Equipping teenagers with the knowledge and skills to make informed financial decisions is an investment in their future success.

Statistics show that personal finance is not even close to being amongst the most populated high school courses across the nation. Thus, I give you five things I wish I could have learned about personal finance when I was still in high school.

i) Open Communication 

  • Parents in general do not want to discuss family finances or their budgeting decisions, discouraging teens to ask questions.
  • Teach them about how to handle their finances in real time by showing them how to budget.
  • Having these conversations, especially as kids transition into adults, helps demystify financial topics.

ii) Basics of Credit and Debt 

  • Most people do not fully grasp the understanding of credit and debt until taking an actual accounting course in college.
  • Comprehending the importance of maintaining a good credit score is crucial to avoid potential consequences of accumulating debt.
  • Responsible credit card usage and the significance of paying bills on time is a life skill that should be learned prior to going to a four-year university.

iii) Investing & Compound Interest

  • I’m not sure why the common curriculum does not introduce teens to the concept of investing and the power of compound interest.
  • By seeing the benefits of growing investments over time, students will develop a stronger understanding of patience.
  • Utilizing these real-life examples make these financial concepts tangible.

iv) Taxes & Workplace Benefits

  • The basics of taxes, tax laws by state, and workplace benefits (401k) are something that all young adults should know about.
  • More so, understanding deductions, tax returns, and benefits offered by employers prepares teens for financial decisions in their future careers.

v) Real-World Experiences

  • I wished that I facilitated real-world experiences like opening a savings account, managing a small income, or possibly participating in financial workshops.
  • Above all, practical exposure allows teens to apply theoretical knowledge in everyday scenarios.

Comments, Questions, Concerns?

Why do you think that American education choose to ignore personal finance classes in high school? Do you think it’s because teenagers need to learn the basis of other subjects firsthand?

Let me know what you think below!