One of the questions I always ask guests when I interview them for my blog is “What were your experiences as a kid when it came to money?” I also ask them at the end, “What advice would give to someone who is trying to better themselves on their financial journey?” Some have said that they had family members who were entrepreneurs that they watched or there were people in their community with money. Others said no one sat them down and explained to them how money works, how to save, and how to grow your money. However, they all said that one of the most important parts of building wealth is to educate yourself.
This forced me to go back and think about what my money experiences were growing up and what I wish I would have known or what I wish I would have been taught now that I am older. The question I think about now is should financial literacy be taught in schools? If the answer is yes, is a good case for it? You could say that some of the responsibility is on the parents to teach their kids about money and not the schools. However, there are parents that aren't good with money themselves and need better money habits. Because of that, I think it should be mandatory that financial literacy is taught in schools because the earlier someone learns how the game of money works, as they get more money, those early lessons can have a positive effect not only on their lives but the lives of those close to them.
Less Likely to Fall Victim to Bad Purchases
Many times, we make purchases off of impulse and emotion. Not having the discipline to say no to things when we can't afford them is a problem that can come from our what we were taught when we were younger. Understanding how human behavior works is critical and if it is instilled when you are young that just because you can charge something to a credit card, it doesn't always mean you can afford it. Learning to save and sometimes sacrifice in the now for something you want later on and actually have the money to purchase is a great lesson.
The Reality of the Real World
The real world is filled with bills, credit card, loans, equity, taxes and more. By not learning about these things when you are young and how to handle them instead of the other way around is another great lesson to teach. Without this, we do a disservice to our students. Learning how to open up a checking account, avoid bad credit cards and find good ones, how to calculate interest payments on your loans and the consequences of not paying them back. You should have a general understanding of how the tax system works and how to legally avoid paying more taxes than you need to. All of this is important as you're heading to college and even more so because once you graduate and are on your own, these things are coming whether you like it or not and the more prepared you are to begin with, the better off you'll be.
Saving and Investing
Once you are financially literate, you now have the ability to have your money work for you and multiply it by more than you could have thought. You realize that you can make money without always having to put more time in. The earlier you start and the better. The idea is that the longer time you have for your money to grow, the more opportunities you have to help you achieve whatever financial goals that you have. This can help you create the life that you want which brings me to my next point.
How to Learn to be Free
By having the knowledge of finances and how they work, you are closer to becoming free because you know that being an employee and going to school aren't the only options to make money anymore. You can study how people create systems and convert products and ideas into making a sustainable living. Freedom is something that allows you to live the life that you want, on your own terms; you need money to do that. Understanding what expenses you have, how to still make money, and how to use your money as a tool is something that can all be established early on in life.
Here are a few reasons I believe financial literacy should be taught in the schools: Every decision we make is tied to finances. We go to school to further ourselves in life and to create opportunities for ourselves but many of the things we want to accomplish are not possible without money, that's why it's so important to learn about it!
I would love to hear your opinions in the comment section below about if you think financial literacy should be taught in schools or not. I also included a basic financial literacy test in the link below to how financially savvy you actually are!
Test Your Financial Literacy!