Why Most High School Graduates Can’t Manage Money

High school graduation hats high

As a teacher who has worked throughout the educational system I have witnessed the lack of financial instruction provided in our schools. The inadequate financial education that most young people receive, unfortunately, doesn’t always manifest itself until years down the road. Market Watch states that more than 60 percent of American adults have less than $1,000 in savings and no cash for emergencies. An insufficient understanding of basic money management principles is having a profound impact on the long term financial stability of millions of Americans. The following information discusses why financial classes are generally not being offered, the impact this is having on America’s financial practices, and solutions to this growing problem.

Why Financial Classes Often Aren’t Offered

I understand how subjects and classes taught in the educational system are strictly regulated at the state and federal level. This often makes it difficult for schools to offer financial educational classes as more than electives. It usually takes a legislative mandate for schools to permanently and consistently offer any particular class. While Chemistry, Algebra, and United States History are required in many high schools across the country, money management classes usually aren’t. Personal finance classes simply aren’t required to graduate. Another reason these types of classes normally aren’t taught is that questions regarding managing money usually aren’t included on standardized tests. Even if finance classes are offered as electives many students are filling their schedules with courses that are often deemed more fun to take, such as music, art, and athletic classes.

The Devastating Impact on Students and America’s Finances

The result of not taking basic financial courses means that millions of students graduate without understanding how to properly balance a checkbook or create a budget. Many students don’t understand basic concepts such as living within your means and the importance of beginning retirement savings at an early age. Most American’s financial status reflects the dismal state of financial education in our schools. Millions of Americans live paycheck to paycheck and have little to no savings. Credit card debt is also on the rise and default is a problem that can damage a person’s finances for years. According to Council for Economic Education financial literacy is our number one problem economically that is facing this current generation. The argument could even be made that student debt among college graduates might not be so dire if high school students actually knew what they were getting themselves into when taking on extravagant college loans. While the numbers are slowly increasing, only 17 states require students to complete a personal finance class as a graduation requirement.

What Can Be Done to Solve the Problem

State officials may fear that requiring financial classes will further strain already stretched educational budgets. There are ways, however, to implement financial management courses without spending an excessive amount of money. Training can be provided for current math and economics teachers who would be eligible to teach a variety of financial classes. If this isn’t an option for smaller schools, outsourcing the expertise from their surrounding community could be another option. Local financial institutions could serve as a facilitator for courses and help build an adequate curriculum. These professionals could even assist students in setting up checking accounts and managing a debit card. Other opponents may argue that making yet another class mandatory will only add to an already crowded curriculum.  By giving math or business credit to students, financial classes could be easily incorporated into what is already required. Even having just a semester of money management during the junior or senior year in high school could go a long way in solving America’s financial literacy problem.