Anyone who has ever struggled with a difficult class in school has asked the question, “Will I ever actually use this stuff after I graduate?”

Once students graduate, most probably won’t dissect a frog or use the pythagorean theorem on a daily basis. However, there is one thing for sure: they will need to know how to handle money wisely—and the sooner the better.

Almost one half of teens never create a budget. 76% of millennials are not financially literate. That’s why it is extremely important to teach personal financial education and/or financial literacy to students in and outside of the classroom. 

What Is Financial Literacy?

Financial literacy classes teach students the basics of money management: budgeting, saving, staying out of debt, investing, doing taxes, planning, giving, and more. That knowledge lays a foundation for students to build strong money habits early on and avoid many of the mistakes that lead to lifelong money struggles.

Financially literate individuals have an understanding of basic financial concepts and can apply them in their own life. Here are some topics that fall under the scope of financial literacy:

• Opening a bank account
• Paying bills on time
• Creating and managing a household budget
• Understanding how credit works, including how to improve your credit score
• Using debt responsibly
• Saving money for retirement
• Comparing financial products, such as credit cards or investments

Financial literacy impacts every aspect of your life. The sooner students understand these concepts, the better, especially if they come from families who don’t prioritize financial literacy. Over time, financial illiteracy can lead to problems like poor spending habits and unmanageable debt. It’s harder to unlearn negative habits than it is to learn new ones, so these classes will, in theory, set the younger generation on a path to resilient financial health.

What Are the Benefits of Learning about Money at an Early Age? 

It’s essential to start learning about money at a young age. According to the Financial Industry Regulatory Authority (FINRA), 53% of individuals with higher financial literacy spent less than their income, and 65% had set aside a three-month emergency fund.

In comparison, 35% of individuals with lower financial literacy spent less than they earned, and 42% had a three-month emergency fund set aside. 54% of millennials expressed worry that they would not be able to pay back student loans. The pandemic revealed just how ill-prepared many people are for a financial emergency. A Federal Reserve study found that many Americans would have difficulty coming up with $400 to cover an unplanned expense.

Why Should Students Take Financial Education Courses?

When students take financial literacy classes, they will learn the basics of budgeting, saving, and managing debt. This education provides a strong foundation they can build upon as adults and helps them avoid lifelong money problems, setting themselves on a path toward success early on. When kids learn how money works at a young age, it serves as an essential building block to becoming a successful adult. We are creating the financial consumers of tomorrow today. 

Farrel Liger, Inc is a financial education firm dedicated to empowering the world through financial education. We aim to equip students with the necessary information to navigate the financial system and create wealth for themselves and their families. Our courses are designed to teach basic financial literacy, including topics like budgeting, banking, and credit. We will teach students through different delivery methods, such as   social media posts, in-person courses, and virtual courses. With our help, your students will be able to make sound financial decisions that will benefit them both now and in the future. 

To learn more about our courses and how we can help, please go to www.farreliger.com.