You've probably been using money ever since your parents gave you a dollar a week as an allowance. Hopefully since then you've asked for an increase, and one day you'll have way more bucks to keep track of (fingers crossed!).
But as they say in Spiderman, "With great power comes great responsibility." Are American young people prepared to handle finances?
The Problem
Statistics show that a majority of Americans lack the knowledge to make good financial decisions. In a National Bureau of Economic Research study, adults scored a grade of “C” in financial literacy. High school students failed.
A recent poll by the National Endowment for Financial Education (NEFE) showed that 84 percent of high school students said they needed more education on financial management topics, yet only 12 states require a personal finance course before graduation.
Personal finances aren’t being taught at home either. Experts say many parents feel more comfortable talking to their children about sex, drugs and alcohol than about money.
Solutions
We need to understand basic concepts for managing money.
Here are some tips from Discover's Pathway to Financial Success [1] program on how to take your financial future into your hands:
- Ask your parents to review bills with you. Have them show you how car insurance, electric, and other payments work.
- Join Mom or Dad at the grocery store. Challenge your family to use coupons, purchase generic brands, substitute sale items, and avoid prepackaged foods. Extra points if you can calculate how much you saved at the end of the trip.
- Set a savings goal. Whether you have a bank account or a piggy bank, set a goal of how much time it will take to save up for a purchase (i.e. video game, new jeans, etc.).
- Petition to have financial education in your school if you don't already. Financial education is beneficial to have at both home and school.
[2]
Additional Sources:
Jump$tart [3]
Christian Science Monitor [4]
MSNBC [5]
National Endowment for Financial Education [6]
Dollars and Sense [7]
Young Money [8]
Practical Money Skills [9]
Education [10]
Financial Education [11]