Financial literacy is a critical skill to have, and it can help you pay for your home, your child’s education, and even your retirement. Without the proper knowledge, you can make bad financial choices and wind up in debt. Seven states now require that high school students take a financial literacy course. That means that roughly one in nine students will take a financial literacy course before they graduate from high school.
Financial literacy includes budgeting and saving. It teaches you how to set and meet financial goals, which helps you to make better decisions. It also helps you to understand what kind of investments you should make. Whether it’s a mutual fund or a fixed-rate mortgage, financial literacy teaches you the ins and outs of different financial instruments.
For example, the Des Moines Area Community College offers a financial literacy course through its online program, Buttonwood. This course teaches students personal finance basics, including how to build a positive credit history. Taking this course will help students make wise financial decisions when they graduate. And because these financial decisions will have long-term consequences, they’re not just theoretical.
One study found that students who took a financial literacy course were less likely to borrow payday loans, saving them from high interest rates and debt cycles. In addition, teaching students the basics of money management will help them build good habits early on and apply what they’ve learned. Expanding financial literacy education is a critical part of improving economic mobility and decreasing the wealth gap. There are many resources available to help educators teach financial literacy to their students, and you can use them to teach this vital skill.