Financial literacy is a real-world skill that is often overlooked in the public school system. However, there are many benefits from implementing good financial habits at a young age as well as issues younger generations will face that, in my opinion, should bring some urgency to teaching children financial skills.
First, it’s important to understand what financial literacy is. Financial literacy is knowledge of saving, spending, investing, protecting, and borrowing money in addition to credit management, reducing debt, and avoiding scams.
According to the article, “Financial Literacy for Youth: Why It Matters” by United Way NCA, there are life-long consequences of financial decisions. “Equipping young people with tools to manage their money effectively helps them avoid the cycle of debt and economic insecurity” that many Americans face today. Starting preparation at a young age can set a “foundation to a secure financial future.”
With the information I have gathered as well as being a part of Gen Z, I have some concerns in regards to the lack of financial education within the school system. For starters, I myself feel completely unprepared to enter the world of financial independence.
Samantha Belgio, a junior health studies student, said, “I have to rely on my parents for most financial questions and explanations. I don’t feel as thought the education system has prepared me for future financial independence as I haven’t been offered to take any classes that give financial insight. Despite this, I do believe that education on financial situations should be crucial and I hope changes are made for future generations.”
In addition to my peers and I’s feelings of uncertainty, Mark Perna released an article on Forbes titled “Why Financial Literacy Isn’t Gen Z’s Sweet Spot – Yet” where he explains that not only are they the most “debt averse generation” but Gen Z has also “scored the lowest in a recent financial literacy study by the TIAA institute and the Global Financial Literacy Excellence Center at the George Washington University School of Business.”
In addition to this concerning fact, Emily Ekins and Jordan Gygi explain in their report for Cato.org, “The Cato Institute 2022 Housing Affordability National Survey found that 87% of Americans are concerned about the cost of housing.” Additionally, 69% of Americans fear that their kids or grandkids won’t be able to afford a home someday. Due to our lack of skills and financial education I worry that these fears may someday come true.
Diccon Hyatt explains in his article, “Teaching Financial Literacy: Why You Need to Start From a Young Age,” “A study by researchers at the University of Michigan found that children form persistent habits with money as young as age 5.” With this information, it is clear that we are doing younger generations a disservice by not offering them knowledge that will set them up for financial success in the future.
Dylan Lane, a junior Communication student, said, “I have gained some knowledge about financial situations for the future there has never been a real class that focuses on the point of financial independence.” Our generation seems to be in for a rude awakening as we totter on the edge of diving into the real world.
As Gen Z begins to dive in and is faced with the responsibility of financial independence, we hope future generations are given more opportunities to learn and develop a skill set in order to have a smoother transition.
