In the United States, financial knowledge has been an ongoing problem for many years. Until recently, school districts throughout the country have not offered classes involving financial literacy. Twenty-one states now require a personal finance or literacy class to graduate from high school.¹ Fifteen of those states, integrate financial literacy in other classes but do not specifically require a dedicated class to be taught.¹ Through the implementation of financial literacy programs in schools, money management, tax preparation, and retirement planning could be taught to reduce personal financial problems in the United States. 

     Money management education can help prepare students to be better prepared for adult life. Learning to balance a checking account can reduce fees for overdrafts and allow people to know how much money they actually have. It would also help people to know where their money is going. With credit card debt being so high, knowledge of how and when to use a credit card would be great for a person to know. Students who study money management will be better prepared for adult life.          

     In addition to money management, knowing how to prepare taxes and understanding the role of taxes can be helpful throughout life. General knowledge of why the government needs to collect taxes and how it affects a person's finances is necessary to understand a person’s financial needs. Consequently, being able to prepare your taxes could save the money that is paid to professional tax preparers. Understanding what taxes are and how they affect us can be helpful for the rest of our lives.

     Finally, an understanding of retirement planning is essential. Knowing when to start planning for retirement and understanding the consequences of waiting too late to save for retirement is something everyone should know. Having a plan for retirement and learning how to go about it would be helpful to a student as they prepare for life. Learning how to determine how much money would be needed for living the lifestyle you want after retirement is also beneficial. Everyone should understand the consequences of waiting too long to save for retirement and when to begin planning for it.

     Relying on family or friends to teach financial literacy is not necessarily a terrible thing but having classes taught in school enhances that knowledge. Teachers of financial literacy should be truly knowledgeable about money management and be able to show that knowledge in their own lives. Money management, tax preparation, and retirement planning are all skills that need to be learned before being confronted with these issues and having to figure things out without any training. Financial literacy classes could help with credit scores, reductions in bankruptcies, and a higher quality of life for many Americans.

 

Reference

Updated: How many states require HS personal finance course? - Blog. (2022). NGPF. https://www.ngpf.org/blog/advocacy/how-many-states-require-students-to-take-a-personal-finance-course-before-graduating-from-high-school-is-it-6-or-is-it-21/