Many Aspects Of Personal Finance

Imparting Personal Finance education to students would provide them with tools for better decision making for their future life.

What is Personal Finance?

Personal Finance involves the coverage of not only managing your money, but also saving and investing. Budgeting, banking, insurance, mortgages, investments, retirement planning, and tax and estate planning are all a part of it.

It is important for an individual or for a household to plan their savings and finances and accordingly plan their current important needs and also their retirement plans.

A few schools in the U.S. do have courses for how to manage your money and learn the basics through free online articles, courses, and blogs; podcasts; or at the library.

Importance to Students

Choice of staying in close proximity of access to quality education is a very important factor in an Americans decision of where to live. However, a lot of families would not focus to educational standards which are different from state to state.

One important deciding factor should be high school personal finance content which can lead to significant impact for the student’s financial well being.

Some important points that students should be enlightened for are – how to pay for college — understanding available grants and financial aid, as well as government vs. private student loans — and avoiding payday lenders and credit card debt.

According to the National Center for Education Statistics, every one in five American 15 year-olds does not understand basic financial concepts showing the lack of financial literacy among U.S. high school students.

Personal Finance:

– Adopted by U.S. States

A Credit Karma/Qualtrics survey revealed that 63% of respondents believe that personal finance should be taught in schools with 30% believing it should start in elementary school while 33% say in middle school and 32% say high school.

According to the 2020 biannual Survey of the States from the Council for Economic Education, five states – Alaska, California, Montana, New Mexico and Wyoming – have not included standard requirement in finances.

Compared to the last survey in 2018, a net increase of four states makes a total of 21 states who have now made it compulsory to take a course that integrates personal finance content.

Also, 25 states now, increase by 3 from 2018, requires high school students take a course in economics.

Meanwhile, six states – Alabama, Iowa, North Carolina, Tennessee, Utah and Virginia – require a personal finance stand-alone course to be taken up. Florida dropped the requirement of including this subject as part of its economics curriculum but added it as a separate course.

– States Not Adopted, California included

There are five states – Alaska, California, Montana, New Mexico and Wyoming – and Washington D.C. who do not have a personal finance standard in their education systems as per the survey’s criteria.

It is surprising that California being the most-populous and largest economy in the state and dealing with constant financial challenges has not implemented in their education systems.

Personal Finance – A need for all socio economic class of society

As per recent data from Next Gen Personal Finance (surveyed 11,000 high schools course catalogs), as cited by The Council for Economic Education, personal finance mandates are very important for children in lower- to moderate-income families. These courses are accessible by 72% of children in wealthier communities while only 56% in lower and moderate-income communities.

Financial Planning Leads to a Secure Future.

Tim Ranzetta, founder of Next Gen, believes that imparting financial education is most important for poor students as teaching the kids would mean teaching the parents which thereby benefits the society by large. He further added that, a stand-alone course taught for at least a semester is the “gold standard” for personal finance in high school.

Daniel Mangrum, a Ph.D. candidate in the Department of Economics at Vanderbilt University, found in recent research that in a year of entering student loan repayment, first-generation and low-income students indicated improvement signs in paying down their balance provided a state mandate in high school. Similar benefits were seen from courses which have financial educational content rather than formal economics.

What Statistics Reveal

A Credit Karma/Qualtrics survey revealed that 63% of respondents believe that personal finance should be taught in schools with 30% believing it should start in elementary school while 33% say in middle school and 32% say high school.

In absence of these lessons from schools/colleges, Americans resort to alternative sources of money advice and information. The survey shows that 41% of respondents said they’re self-taught, while 37% said their parents taught them and a meager 12% said they learned about personal finance from teachers.

Also Read:10 Best Apps for Budgeting and Personal Finances

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