Financial literacy entails teaching students the basics of managing money through investing, budgeting and saving. This knowledge gives the foundation for learners to have resilient money habits at an early age to avoid problems later in life (Morgan, and Long 105). Financial literacy is critical to high school students because it lays a strong foundation for financial stability, reduces minor financial errors, and facilitates students’ debts to initiate saving.
Financial literacy helps students to have a strong foundation for gauging their financial stability which is essential to future leaders. Students with these skills reflect excellent financial management initiated by how a person creates his spending plan and budget (Grohmann and Menkhoff 84). Students with solid skills and firm foundations in financial stability will be able to develop sensible minds that allow them to distinguish between needs and wants
Furthermore, students with financial literacy make fewer financial errors in school. There are several financial mistakes students without financial literacy make, including overspending the little cash given by their parents. Overspending on luxurious things creates an irresponsible trait for students who will be the future adults. Financial literacy equips the students with skills that allow them to develop wisdom on how to minimize their expenditure (Grohmann and Menkhoff 90). Quality expenditure promotes saving and planning hence inculcating stable financial systems in the country and improving the economic status.
Nevertheless, financial literacy alleviates debts in students because they can understand the value of money. When students appreciate the money value, they become capable of handling their cash better. They become more aware of the importance of budgets and savings hence avoiding unnecessary expenses (Jayaraman and Jambunathan 169). Financial literacy helps students avoid unhealthy debts as they only buy the essential items needed in their lives, thus reducing impulse buying.
Financial literacy is essential in high school students because it instills the value of saving and investing in learners. This practice is vital because it forms a saving habit for the student early in life. A student with saving skills needs to have a financial plan, both long and short terms, and learn their implementation procedures (Jayaraman and Jambunathan. 170). Students with such skills are mindful in setting their personal financial goals and can calculate their expenditures to see if they are within their budget limit. Such students will focus on high savings and investments in their future lives.
However, financial literacy is not taught in many schools in the United States of America because the program is not included in the national curriculum provided by the government. To the state, including this course needs more funding while some schools may not be able to cater for these expenses. For the schools to provide a central curriculum, they should adopt an education system that is affordable and accessible to all students and schools (Kyoung et al. 195). Some education stakeholders, like teachers, believe that students should only concentrate on their academic studies. To the teachers, financial literacy skills are irrelevant to students who are still learning and not in a position to earn money.
Conclusively, financial literacy involves skills and knowledge in saving, budgeting, and spending money. High school students need these skills to have a strong foundation for financial stability, reduce overspending errors, alleviate debts, and promote savings and investment. However, this literacy is not practiced because it’s not in the education system of the national curriculum.
Works Cited
Grohmann, Antonia, Theres Klühs, and Lukas Menkhoff. “Does financial literacy improve financial inclusion? Cross country evidence.” World Development 111 (2018): 84-96.
Jayaraman, J. D., and Saigeetha Jambunathan. “Financial literacy among high school students: Evidence from India.” Citizenship, Social and Economics Education 17.3 (2018): 168-187.
Kim, Kyoung Tae, Somer G. Anderson, and Martin C. Seay. “Financial knowledge and short-term and long-term financial behaviors of millennials in the United States.” Journal of Family and Economic Issues 40.2 (2019): 194-208.
Morgan, Peter J., and Trinh Quang Long. “Financial literacy, financial inclusion, and savings behavior in Laos.” Journal of Asian Economics 68 (2020): 101197.
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