Why Should Financial Literacy Be Taught in Schools?

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Children and a teacher in a classroom - Why Should Financial Literacy Be Taught in Schools?

Money cannot buy happiness, but it is a vital part of being happy. That may be a controversial thing to say, but it is the truth because money is what allows you to live. That means that having literacy around your finances is key to ensuring happiness and security.

Depending on the amount of financial literacy you have can be the defining factor of whether you live paycheck to paycheck or comfortably. That is why this basic life skill is vitally important and should be taught in schools.

So many kids get out of school and enter the adult world without a firm grasp of this subject and quickly find themselves in debt. That is why we thought we would take a look and dive deep into why financial literacy should be taught in schools.


Why Is This Important?

Financial literacy is so vitally important to a curriculum because you have to be able to manage your day-to-day expenses and budget for your future. You have to have a plan and be able to save money to not only retire but live life to its fullest.

However, in the US, many Americans struggle with having the ability to actually do just that.

With financial literacy correctly attached to the rest of their school, kids that exit high school entering adulthood will have a better understanding of the importance of money and money management.


What Are the Advantages of Higher Financial Literacy?

There are a lot of advantages when it comes to individuals having a higher financial literacy education.

These advantages are not only for the individual but for the economy as well. This is because the more financially stable and secure people are, the better the economy will be.

For individuals, the advantages of financial literacy include the following:


  • Knowledge and understanding of how to make better financial decisions
  • Improved money management when it comes to income and debt
  • Better ability to be able to reach financial goals
  • Decreased spending thanks to better budgeting capability
  • Reduction of stress anxiety due to financial issues


All of these factors will allow an individual to live a more stable and secure life. Therefore, it has been proven that they’re more unlikely to invest back into the economy because they have the funds and feel secure and spending them.


Are Financially Literate People More Likely to Be Successful?

The concept of what success means is an individual definition. Though some cultural and societal guideposts often signify a successful person. These include being able to live comfortably instead of paycheck to paycheck and having a retirement plan in place.

Because these are standard guideposts in almost every culture, having financial literacy will most definitely lead to more success. This is because those with financial literacy can budget and manage their expenses better.

Thereby allowing them to have savings and money available to them when needed and better prepared for their retirement years. It also means that they understand investments and the inherent danger and uncertainty that comes with them.


Do Financially Literate People Have Fewer Loans?

Loans are often taken out when you handle the expenses you have or an emergency requires you to have more money than you have on hand.

That means if you struggle with understanding how to budget your day-to-day expenses and save money, you will inevitably have more loans.

On the flip side of that coin, that means those that don’t necessarily have third-party establishments helping them out can have good savings and cash flow available to them.

So yes, if you are more financially illiterate, that does mean there will be fewer loans which in turn will mean less debt, and that is not only good for the individual and their future but also the economy.


What Percentage of Americans is Considered Financially Literate?

Financial literacy is not included in most curriculums across the United States. Unfortunately, that means that the teaching of this vital life skill is left up to the parents, and because they have not been taught financial literacy, it tends to fall by the wayside.

This is one of the many reasons why debt and poverty are so rampant in the United States.

According to many of the latest surveys, approximately half of the United States is considered finance literate.

But unfortunately, that means that the other half of the United States is financially illiterate, and this could be one of the key components and why the economy is struggling so much.

Along with that, these individuals’ lack of financial stability often leads to higher levels of mental health and physical health issues.


Final Thoughts on Why Should Financial Literacy Be Taught in Schools

Financial literacy is an important life skill that many people struggle with. This may be because, especially in the United States, it is not made a focus in the curriculum.

Including it in a school’s curriculum, the education system would set future generations up for success in financial matters, and that, in turn, would set up society and humankind in general for a more stable and happy life.