As countries like the United Kingdom and Australia have already voted to make personal finance education necessary in school systems, the United States of America is also moving fast to assert their leadership in this vital venture of bringing back financial classes in schools and colleges. Promoting financial literacy is the primary aim of these countries and since the young generation is the future, it is all the more important. A few weeks ago, the CFPB or the Consumer Financial Protection Bureau introduced ‘Transforming the Financial Lives of a Generation of Young Americans, a white paper with particular recommendations for promoting financial education is grades K-12. At the same time, the Treasury Department has also created a website called moneyasyoulearn.org, a site that offers teachers personal finance lessons that befits their English and Math classes.
The schools in the US are usually governed at the state level and are it pretty unlikely that they will ever have a government mandate for enhancing financial education for K-12 as it is in the UK or Australia. But most of the states have started participating in the common initiative of boosting financial literacy and this will be in force throughout 2015. Apart from this, the new website of the Treasury will also help teachers with worthy personal finance lessons.
It’s all about not repeating financial mistakes
CFPB is the powerful financial federal watchdog that sprang from the economic crisis and it has the wide-ranging interest of safeguarding the interests of the individuals. Since its birth, CFPB has been focussing on simple financial statements and mortgages and now they have turned to the younger generation. Young generation should not repeat the financial mistakes committed by their previous generation. This is why CFPB is supporting this plan to incorporate financial lessons in K-12 classrooms. Here are the recommendations of the agency.
Introduce some of the most vital key financial concepts in kindergarten and a personal finance course for graduation for college
Introduce classes on personal finance questions in some tests and exams
Offer incentives and perks to teachers who are involved in training in personal finance class
Provide practical learning chances as they start relating to poor economic management
Offer parents with different tools that discuss money topics with their kids
Personal finance classes are the most vital class in college
Whenever you head off to college, you step out of the bubble created by their parents, and it is then that you prepare for a career and start making decisions on your own. Your first lesson should be to set up a budget and stick to it throughout the month. No matter which stage of life you are in, creating a budget and then sticking to it can also be a tedious job.
Lessons on credit card are vital too
Apart from the normal personal finance course, you also have to learn about credit cards. There are some personal finance advisors who focus on some of the negatives of cards but one should always know about the positives. Using a credit card means that you don’t need to carry a lot of cash but that doesn’t mean that you have to buy everything with credit cards. They carry outrageously high interest rates and hence you should use it according to your affordability. Over-using credit cards will lead to credit card debt and that will make you run after third-party companies after going through the debt consolidation reviews.
Other financial advice for students
Apart from the above mentioned advice on general personal finance and credit cards, here are some other advices for college students that they need to follow.
After opening a checking account, you should obtain a debit card and not a credit card. However ensure that there is at least one branch ATM nearby so that you can withdraw money whenever you need to. If the bank that your family uses doesn’t have an ATM near your college campus, switch to one that has.
Students with their ID can avail to different discount programs and you should look for such programs. There are many local businesses who give 10-20% discounts to students.
Try getting a part-time job as there are many openings at the start of each semester. This will help you with some passive income.
It’s time to save money for emergencies and for some big purchases that you plan to make down the road.
Hence, it can be well understood that personal finance is indeed one of the most important lessons that should be included in high school classes. The current young generation should be financially literate as it is only then that they can grow up to be responsible individuals who will cause no further harm to the nation’s economy.