It is widely believed that lack of financial literacy in our society was a major factor in the recent financial crisis. Financial literacy in today’s world is almost as important as learning to read and write and one could argue that a student’s credit history is far more important to his or her future than grade point average. Yet most students come to college ill-prepared to manage their money.
What is financial literacy?
Financial literacy is the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.
Financial Literacy in education: What is Financial Education?
Financial education is defined as: The process by which people improve their understanding of financial products, services and concepts, so they are empowered to make informed choices, avoid pitfalls, know where to go for help and take other actions to improve their present and long-term financial well-being.
America’s financial literacy
The average American family spends $1.22 for every dollar it earns. One in five American households with annual household incomes of less than $50,000 are spending 40% of after tax income to service its debt. Americans under age 25 are filing for bankruptcy faster than any other age group.
Where can Financial Literacy be incorporated?
1. as part of the Social Studies curriculum
2. as part of the Math curriculum
3. as part of a Career Preparation curriculum
4. Stand alone presentations by the counseling staff
5. Stand alone presentation offered by outside organizations
Financial Literacy for Students:
The NFEC offers comprehensive financial literacy solutions for schools (K-12), colleges, and universities that can have a lasting impact on students’ lives while also benefiting the schools. The NFEC provides resources ranging from simple classroom materials to comprehensive financial education campaigns.
Colleges and universities use the NFEC’s college financial literacy programs not only to educate youth about finances, but also to reduce student loan default rates, protect Title IV funding, recruit new students, and improve graduation rates.
The high school and elementary school financial literacy programs are designed to prepare students to handle their own personal finances, encourage pursuit of higher education, and prevent high school dropout. Programs offered by the NFEC can accommodate a variety of scheduling and budget requirements. They also are designed to help schools raise funds and involve parents in the process of educating our children about finances.
Financial Literacy for Students – Important for Individuals and Communities
Financial literacy for students is an important tool to improve the financial capability of our youth and communities. Students should be taught how to handle money—both at home and in school. This will help reduce the economic impact of the long-term recession that now grips many communities across the country.
Teaching kids about money has a great impact on their future. Grasping even the most basic lessons gets students considering available options before making important monetary decisions; in turn, this careful consideration may help them avoid personal debt and