Teen's Financial Literacy

In this society, some of the most important things in your life have to deal with money. In Chad Foster’s book, Financial Literacy for Teens, he taught his readers how to save, spend, invest and give away your money. Reading this book has taught me to start saving when I’m young, know the differences of what I need to buy rather than what I want, to make money while I sleep and giving away some of your money will not only help yourself, but help many others as well.

The idea of adding a financial literacy course into schools curriculums and requiring students to take it before graduating is a current decision being considered by numerous school districts. Supporters of this idea say that it would have a positive effect while the people who oppose this idea state that financial courses don’t work.

Throughout unit three of the Financial Literacy lesson, payment types, I learned many things. To begin, I learned about credit. Credit is an agreement where a borrower receives something of value now and agrees to repay the lender at a later time. This is very useful, because it not only allows you to make large purchases, but it allows you to make purchases with ease. When considering getting a credit card, it’s important to research some information about them. This includes the interest rate charged by your credit card company, special fees, rewards, and the maximum amount you can charge to your card. While credit cards can be fun to use, it’s important to use them responsibly. You should make your payments on time (this will help you stay

In school, students are taught about Math, Language, Social Studies, History. We get taught things that do not apply to the real world. We do not get taught how to save money for our futures and we also do not get informed on how there are not many jobs open for our generation in the future which is a problem. As you can see, if we do not learn about this topic at an early age, and it can act as a potential liability to our future endeavours which results in an overall negative impact on our lives.

For those fortunate to have connections with experienced individuals in the world of finance, take advantage of every bit of advice that comes along. Regrettably, most high schools don’t provide courses that educate students about personal finance, but maybe that will change in the future. An understanding of personal finance among the youth is alarmingly below where it needs to be and I can’t stress enough how important it is to create healthy habits at a young age in order to set yourself up for success in the not-so-distant

“…..the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being” (pg. 66). Supporting our earlier study (Yates and Ward, 2010) After reviewing the literature on financial literacy, the following common personal finance knowledge topics were determined: emergency funding; saving and spending plans; using credit effectively; consumer debt; home mortgage debt; building wealth; financial planning and risk management; retirement planning; saving for children’s education; and estate planning. (Are Your Personal Financial Characteristics Healthy?)

Sadly, the problem is that parents, the expected and trusted source of that learning often don’t have the skills to pass it on to their children. That’s because they didn’t learn from their parents. In fact, a survey by the Networks Financial Institute found that less than 30 percent of American adults view their financial knowledge as very good (http://www.networksfinancialinstitute.org/thoughtleadership/publications/Pages/default.aspx). It gets worse. Another study by Dartmouth Prof. Annamaria Lusardi (http://www.dartmouth.edu/~alusardi/policy.html) found that only 18 percent of 1,700 adults in their early 50s could correctly answer a question about compound interest. And another survey for found that parents would rather talk to their kids about the birds and the bees rather than money management (http://www.businesswire.com/portal/site/schwab/index.jsp?ndmViewId=news_view&ndmConfigId=1010973&newsId=20080326005384&newsLang=en).

Financial literacy involves the choices you make about how to secure the resources that you need to fulfill your basic needs and achieve your goals. Financial literacy involves is a toolbox that contains many different tools. Below is a discussion of some of those tools.

Mandell, L. & Klein, L. (2009). The impact of financial literacy education on subsequent financial behavior. Journal of Financial Counseling and Planning 20(1): 15-24.

In the summer of 2010, Ken Rebeck, William B. Walstad, and Richard A. MacDonald published their article, “The Effects of Financial Education on the Financial Knowledge of High School Students,” in The Journal of Consumer Affairs. The research found in The Journal of Consumer Affairs focuses on consumer behavior and protecting consumer’s interests. The authors’ article investigates whether or not financial education has positive effects on the knowledge of high school students. The study presented within this article takes place in New York, Minnesota, Texas, and Maryland where teachers are trained to teach financial classes to the students who are tested before and after the financial education program. The program involved in the study

We all know that money does not grow on trees. However, children and teens in this generation think differently. Every parent should know that most children would leave their home from high school with little if any training in finances or money management. As a result, they are likely to experience many years of disappointments and aggravation with managing money. The purpose of this paper is to prepare parents to teach their children the knowledge, principles and skills they need in order to enjoy financial burden and despair as they approach adulthood.

High school gives students the skills to understand extreme math, like how to calculate how fast a plane is going, but not how to apply it into managing money in real life. Financials, such as budgeting to pay bills and not fall in debt, should be taught in school in order to help students succeed in the future and buy the things they want and need. A study done in 2016, by ING Direct, shows 87% of young adults admit they don’t know much about personal finance, like how to pay a bill once they first moved out on their own or get a loan. “Today, most teenagers are not learning any personal money management skills because no one around them talks about it,” says Judy Hoberman, marketing expert, President, and CEO of Selling in a Skirt. Data from national foundation for credit counseling showed 76% of college students wish they had more help to prepare for their futures earlier on. The consequences of not

post-secondary loans and jobs, and the majority will be heading into these obligations without sufficient education. 6,800 twelfth grade students completed the 2008 Jumpstart Coalition survey of financial literacy, correctly answering an average of 48.3 percent of all questions, the lowest ever recorded, while in 1997, an average of 57.3 percent of the questions was answered correctly by twelfth graders, 9 percent more than 11 years later (“The Financial Literacy of Young American Adults”). The survey questioned students’ understanding of credit cards, bank loans and investment, much of which was foreign to these young adults. It is irrefutable to say that money in society becomes increasingly important as time progresses, so ideally, knowledge of it should also be increasing. Instead, it is decreasing, suggesting that as the world becomes more financially complex, students are less understanding of the concepts, which will likely

As many people are aware, it is apparent that individuals in today’s society are constantly battling with financial hardships. Young adults in todays society

Hastings, J. S., Madrian, B. C., & Skimmyhorn, W. L. (2013). FINANCIAL LITERACY, FINANCIAL EDUCATION AND ECONOMIC OUTCOMES. - PubMed - NCBI. Retrieved from http://www.ncbi.nlm.nih.gov/pubmed/23991248