USA Today recently published the results to a survey that proved the lasting impact of exposing young people to financial literacy from a young age. Surveying 65,000 students, they determined that programs in high school lead to a distinctly higher rate of improved behaviors around money management.
These effects are immediately seen in college when students are on their own for the first time. Those who received education on the topic have proven to be more averse to debt, more likely to pay credit card bills on time, and less likely to go over their credit limit. Students who did not receive this education were shown to be more likely to already have credit card debt and a history of repeated late payments.
Research has shown that as little as 10 hours of personal financial education will reshape how students spend and save over a lifetime. Unfortunately only 17 states require financial literacy classes in high school – and of those, only 5 require a stand-alone course.
"As student loan debt continues to rise and finances remain the number one reason students drop out of school, making sure students know how to budget and handle debt is seen as critical." (USA Today)
We see the consequences of financial illiteracy during times of national strife. During the Great Recession, there was a huge spike in home foreclosures, bankruptcy, lost jobs due to bad credit history, and less people heading to higher education.
"Some critics of a mandatory class say parents, not schools, should teach children money management. But a study by the Council for Economic Education found a third of parents are more comfortable talking to their children about smoking, drugs and bullying than money." (Orlando Sentinel)
>> How might we activate more high schools and colleges to implement education on financial literacy? How might we make these classes engaging and memorable for students?