According to a report by the Federal Reserve, the average household carries approximately $134,643 in debt. Take a look at other facts about the way majority of people handles their finances.
- 26% have no money in savings
- 10 million households do not have bank accounts
- 38 million households are one paycheck away from a disaster
Not only are these statistics alarming, but they suggest that the average consumer could have benefited from personal finance courses in high school.
Benefits of Offering Personal Finance Classes in High School
If the trajectory of spending and indebtedness continues, future generations will continue these unproductive financial habits. To avert this potential crisis, every high school should offer personal finance classes. Here’s why:
Students will develop into adults who make sound financial decisions
Many adults do not fully understand the ramifications of poor financial habits until they make money mistakes. Teaching students how to budget, save money and maintain high credit scores empowers them to see the big picture when it comes to money.
Financial education can teach students the consequences of incurring high amounts of debt that can lead to financial insolvency
Each year, approximately 800,000 businesses and individuals file bankruptcy. Although medical bills account for a small percentage of filings, many people file because their income can no longer support their spending habits. Thousands of bankruptcies could have been averted if the filers had learned in high school to manage their money.
Good financial habits can be instilled in students at an early age
Bad habits are difficult to break. This is especially true when it comes to money. Students who practice good personal financial management skills are more likely to develop good habits such as paying bills on time, saving for retirement and prudent spending habits.
Students will develop money confidence
Financially stable people are self-assured when it comes to making financial decisions. People who have money confidence are less likely to:
- Spend frivolously on luxury items to impress friends and family members.
- Apply for loans with high interest rates such as payday loans and title loans.
- Live paycheck to paycheck in hopes that everything will magically work out.
By learning about personal finance in high school, students will develop the necessary skills to lead prosperous and productive lives.
David Milberg is a financial analyst in NYC with nearly 3 decades of experience in the finance industry. He is a long-time owner of Milberg Factors, a factoring and finance company with locations in New York, California, and North Carolina.