Your student may never need to calculate the area of a circle in her adult life, but she will certainly need to calculate an interest rate. So why is financial literacy completely left out of most high school curricula?
The answer to that question is complex, but the result of widespread financial illiteracy is crystal clear: Americans have more debt and less financial freedom than in the past.
Consumer debt in the United States is at an all-time high, with the average American household carrying more than $130k in debt. More importantly, this debt is growing faster than our incomes.
Large debt can be especially burdensome for young people, who sometimes borrow huge sums to fund their higher education. While borrowing for college is often a worthwhile investment, it can also burden young professionals with monthly payments their salaries do not cover. Thus, it's critical for teenagers to understand the rudiments of borrowing and saving in order to make smart financial decisions as they plan for college.
Student Loan Debt: The Facts
As the cost of college rises beyond what most families and student can pay out of pocket, college debt has become more common - and more problematic.
While the "student debt crisis" is fueled primarily by the inflation of college costs, students' attitudes toward borrowing and saving are another important factor. That's why it's critical to seek out opportunities for your teen to become more financially literate.
Building Financial Literacy
A 2016 study by the FINRA Foundation showed that two-thirds of Americans cannot pass a basic financial literacy test. This result makes sense, given that most people never receive a formal financial education. Financial literacy is often passed from parents to children, and these financial skills can make a huge difference to your child's future.
Wondering how to build financial savvy at home? Here are a few tips to get you started:
Strong financial skills will benefit your child for the rest of his or her life. To learn what you and your teen can do now to build a strong financial foundation for the future, join us for a free, one-hour workshop for students and parents on Saturday, Jan. 26 at iLearn Academy. This event will cover budgeting, tax-advantaged college savings plans, credit scores, and long-term investing.
Seating is limited; you can RSVP here.