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Why We Need Financial Education in Schools

No matter what field or industry you work in, you have to deal with your own finances. So why aren't students learning about it in schools?
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April is National Financial Literacy Month, a time devoted to promoting financial education.
Personal finance should be a course that all students take before graduating from high school. However, only four states require students to take a semester of personal finance education; a higher 20 states require students to take classes where personal finance is included in the curriculum, according to the JumpStart Coalition. Additionally, 45 percent of graduating high school seniors said they were not ready to manage their money, according to a June 2010 Capital One study.

These numbers are devastating.

And if you think young people become more savvy with their finances once they enter college, think again! According to Sallie Mae, 50 of college students have more than four credit cards and the average amount of student credit card debt is greater than $4,000. The study also found that a paltry 17 percent of students pay off their credit cards. Is anyone asking why anyone, not to mention a college student, needs four credit cards?

Given the unstable economic times we live in, the need for financial education among young people has never been more important. In school, we learn the traditional subjects of math, science, English and history -- all important subjects. But I think we can all agree that knowledge of personal finance is a lot more useful than learning about derivatives in Calculus. No matter what field or industry you work in, you have to deal with your own finances. So why aren't students learning about it in schools? Think about it: many students go through high school without hearing the words "credit cards, credit scores, mortgages etc." If we are ever going to prevent future economic downturns, we need to educate the youth of America about money-related issues.

The housing crisis was one of the main causes of the Great Recession of 2008, where millions of people received mortgages, despite the fact that many of them had poor credit and lacked sufficient income to actually pay for those mortgages. To make matters worse, many consumers didn't understand the terms of their mortgage due to a lack of financial knowledge.

If people were financially informed at a young age, they would have known not to take out a mortgage for a home they could not afford. This would have prevented most of the troubles of the housing crisis and thus mitigated the effect of the recent economic recession. And our government could have saved a large part of the trillions of dollars it has spent over the past two years on bailouts, stimulus packages and other expenditures to try to revive the economy.

How YOU Can Help

With most municipalities facing budget deficits, there's no way any city is going to spend extra money to implement an entire new personal finance curriculum into the school systems. Regardless, to help solve this problem, parents should constantly engage in money related conversations with their children. Talk to them about the importance of saving money and planning for the future and the dangers of resorting to credit cards to pay for things. Start by visiting the Personal Finance section on, which features answers to almost 100 common personal finance questions.

National Financial Literacy Month should also prompt you to become more financially informed. It's not only about young people -- everyone must become savvy about money in order to lead successful and stable lives. Hopefully April 2011 will be a wake-up call to all about the need for finance education at a young age!

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