Financial Education For Our Youths Should Be Mandatory!

Published by Linda Brown on

Why is there a lack of financial education in America’s schools today?   To quote the famous investor, Peter Lynch:  “The junior high schools and high schools of America have forgotten to teach one of the most important courses of all: Investing.”  Why aren’t we teaching financial “literacy” in our primary and secondary schools? 

Why are schools teaching our youths how to work for money but not how to utilize money’s power through investing in “passive” and “portfolio” income?  An example of “passive” income would be receiving rent payments from rental properties.  “Portfolio” income is earned from investments, dividends, interest payments, and capital gains.  Wealthy and financially educated individuals use these types of income to their advantage!  

Our children need an education in financial matters!  Many teenagers today do not even possess “basic” financial skills.  Our youths need the knowledge of how money works and also, how to put their money to work!   The financial education they need is currently not being delivered in our school system. 

Many youths today are being offered credit cards in college when they should be avoiding consumer debt.  Many of these kids have no understanding of compound interest.  They often go into debt at an early age. These same youths have never had a course in money, or taught how to go about investing!     They are without financial literacy!  “Illiteracy” is the foundation of financial struggle!

Flat lay of business concept

Furthermore, studies have shown that many youths graduate from high school with little knowledge of how to even open a bank account or,  how to start saving to reach their goals.  It is interesting to note that studies have demonstrated that those youths who did take personal finance courses had better credit card scores overall.  These youths also had a lower delinquency rate on their debt!

Parents should strive to teach their children financial literacy.  However, many parents, themselves, have not been fully educated in financial matters.  These parents work for money but were never taught how to have their money work for them!  Many of America’s middle class have money problems today because of a lack of financial education.  They were never offered or taught good financial skills in school.  

Youths should have some understanding of basic accounting in order to get ahead financially today.  Accounting can be confusing to our kids, however, to achieve wealth, this course should be a requirement in our schools. Young people should be able to explain the difference between an asset and a liability. Both accounting and investing are important courses!  Many individuals are struggling financially today because no one ever taught them these important subjects.

Our schools do not teach us what rich people already know!  The wealthy, for instance, avoid liabilities and make it a rule to acquire income-producing assets with their money!  This is how many of the rich got started on their path to wealth!  The middle class, on the other hand, will buy liabilities instead of assets! 

It is interesting to note that a school can teach a person to be a highly educated professional in their chosen field.  And, even though this person does very well in their profession, they could be financially “illiterate!”  And, this same individual may later find themselves struggling financially due to their lack of financial education!

In conclusion, our youths should not graduate from high school, or even college, without a firm financial foundation!   Financial skills are vitally important to achieve success. 

Our educational system in this country has a responsibility to ensure that our youths do not leave school without the necessary financial education.  Young people need to be taught how to develop smart money habits.  Financial literacy provides our youth with the necessary skills and knowledge to adequately prepare for their future. 

 Moreover, our adolescents should have an understanding of “passive” and “portfolio” income.  This would ensure they would know how to invest as the wealthy do.  In addition, our youths should be taught the best way to save, how to avoid debt, and educated on the “basics” of accounting.  Financial intelligence has great rewards! 

Linda Brown

I'm an Accountant, Blogger & Investment Consultant with a "Bachelor of Business Administration"degree. Teaching women how to invest in stocks successfully! Men welcome!