From an outside perspective, it’s easy to see financial investments as a relatively black and white field: you put your money behind a business, real estate, a product, etc., and either increase or deplete your wealth based on whether you’ve managed to back the correct investment. However, the truth about investment strategy and the stock market is almost overwhelmingly complex, and the general public’s lack of financial literacy about these subjects actually opens them up to a lot of risk.
Thankfully, this issue has already started to make waves across the American Education system, and should continue to be emphasized as a core tenet of high school academics in the future. As of 2024, 26 out of 50 states in the U.S. now require high school students to complete a financial literacy course before graduation. This is a remarkable step up from the 2022 reports that showed less than 25% of high school students had access to a semester-long personal finance course, so that only 1 in 4 students graduated with the skills to become financially independent and coherent.
Yet, despite the progress being made across the country, there remains a massive portion of the population who still don’t have access to the comprehensive financial literacy classes necessary to succeed in our evolving world. In order to fully prepare our students for a successful career in any field, it’s my opinion that financial education should become a primary emphasis of all high-school curricula.
Financial literacy, broadly speaking, is a fundamental understanding of the skills and processes that are needed to make informed decisions concerning money. Some of the most important topics that fall under this study include the essentials of creating and managing a budget, as well as developing a personal finance plan across multiple years.
More advanced aspects of financial literacy include the development of in-depth investment strategies, which can involve a deep evaluation of the risks and returns regarding a specific stock or investment strategy.
Beyond the obvious benefits to your personal finances, it’s crucial for high schoolers to learn financial literacy early on to avoid the dramatic pitfalls that can occur with poor money management. A lack of financial literacy can quickly lead to spiraling debt, poor credit, and bankruptcy, as well as exposing young investors to financial frauds or scams.
If there was any further argument needed for the importance of financial literacy as a foundational topic in schools, it would be the 2024 report from Investopedia that found a majority of US adults still lack basic financial knowledge today. More than 50% of all adults surveyed couldn’t answer three basic financial questions posed by Professors Annamaria Lusardi and Olivia Mitchell of the Wharton School at UPenn, exposing a radical misunderstanding of interest rates, the stock market, and inflation across our country.
Financial literacy has hovered roughly around that 50% mark for eight consecutive years; in order to make a genuine change in those numbers, action must be taken to account for the rising high schoolers who don’t have access to financial coursework.
If a dedicated effort is made to provide every student with a comprehensive foundation in finance, the next generation may become the first in American history to be fluent in every aspect of personal finance – driving the country forward and making smart, focused financial decisions in every aspect of their lives.
