Every high school student must take courses in physical education, fine arts, and social studies to graduate from Montgomery County Public Schools. It is time that financial literacy was also required for graduation.
It is exciting that MCPS and district leaders are taking notice and that there is a stronger effort at work to make this a reality. But financial literacy at a young age is important enough to be required and should carry the same weight as the other credits needed to earn a degree.
Currently, five MCPS high schools offer the financial literacy option which attracts approximately 200 students per year. This means that less than four-tenths of 1% of the county’s more than 50,500 high school students acquire these skills.
And yet, every day, these same students make decisions about spending and perhaps their entire family’s finances whether they have a job or run errands.
It is imperative that MCPS students graduate with skills to succeed. Knowing how to budget, plan spending, complete a W-4, apply for and pay car and student loans, and establish good credit are key to avoiding mistakes that can affect their financial health for years or even years. decades.
Early financial education allows people to lay a solid foundation instead of fixing problems and putting out fires because they were never taught the right principles.
Financial literacy should be taught in high school because resources for later financial education are less predictable and less reliable.
While some financial institutions offer educational workshops or meet with customers one-on-one, many people – especially in minority and low-income communities – are unbanked, meaning they don’t have bank account and are not serviced by a bank or similar financial institution. institution.
Many adults don’t know where to learn or are too overwhelmed to start, so they remain financially illiterate and subject themselves to poor credit scores and poor decisions. Often, they pass on this lack of focus on a solid financial plan to their children because finances are simply not talked about at home.
Credit card companies can start recruiting new customers as soon as they turn 18. If students are unaware of interest rates and payment schedules, and instead view credit as “free money,” they can get into debt quickly. Debt snowballs as interest rates mount and late fees pile up.
It can be easy to think that technology can make up for a lack of financial education, but that’s rarely the case. Apps can track expenses and create budgets, but only enter data and perform calculations. Students need to know the basics and learn discipline when it comes to spending.
As we move away from brick-and-mortar banks towards online banking, the possibilities for a face-to-face conversation with a finance professional diminish, making a solid foundation of proficiency more important. finances.
Financial education for high school students will likely create a ripple effect at home. Kids can start teaching their parents, or at least eliminate the stigma, of asking about finances and learning best practices and principles.
A 2018 survey found that 77% of respondents find it easy to spend money, 59% don’t track their spending, and 40% have never had a budget. Another survey in 2019 found that the average American spends about $7,429 more than expected every year.
The survey results show the need to teach children about financial principles when they are young.
Budgeting and decision making are at the heart of financial literacy. Creating a budget and knowing how much money is coming in and how much money needs to be spent each month should be simple, but the survey shows that many people don’t plan that way.
Once a budget is established, spending decision-making skills are the next piece of the puzzle. Lessons should use scenarios and stories that secondary school students can relate to and will get them thinking about what is important to them.
They’ll learn to decide if they really need another pair of sneakers or if it’s a good time to update their iPhone.
If adding a course can positively impact over 50,500 high school students, their families, and the wider community, why wait? Why make it an optional course? Financial literacy must be a mandatory requirement for graduating from MCPS.
Audra Pettus is the Director of Community Relations for SkyPoint Federal Credit Union, a member-owned financial institution serving the DMV region.
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