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The Case for Improving Personal Finance Education in Schools

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The Importance of Equipping the Next Generation with the Tools for Financial Success

Personal finance is an essential life skill that can greatly impact an individual’s financial stability, quality of life, and overall well-being. However, many individuals lack the necessary knowledge and skills to manage their finances effectively, leading to a range of financial challenges such as debt, low savings, and poor credit scores. One way to address this issue is to improve personal finance education in schools. By providing students with the knowledge and skills to manage their finances effectively, we can equip them with the tools they need to achieve financial security and success in the future.

Despite the importance of personal finance education, many schools across the United States lack a comprehensive and standardized curriculum for teaching personal finance. As a result, students may graduate high school without a solid understanding of basic financial concepts such as budgeting, saving, and investing. This lack of education can have serious consequences, not only for the financial health of individuals but also for the broader economy and society.

In this article, we will explore the importance of improving personal finance education in schools. We will discuss the benefits, the current state of financial education in schools, the case for improving access and quality of materials, the role of parents and guardians in personal finance education, and the impact of personal finance education on the future of society. We will also provide a call to action for policymakers, educators, parents, and students to work together to improve personal finance education.

The Benefits of Personal Finance Education

Personal finance education provides a range of benefits for individuals, both in the short and long term. Here are some of the most important benefits:

  1. Increased financial literacy: Personal finance education teaches students about basic financial concepts such as budgeting, saving, investing, and managing debt. By developing a solid understanding of these concepts, students can make informed financial decisions and avoid costly mistakes.
  2. Improved decision-making skills: Personal finance education can help students develop critical thinking skills and decision-making abilities that are essential in managing their finances effectively. Students can learn to evaluate financial products, compare costs, and make sound financial decisions based on their individual circumstances.
  3. Reduced financial stress: Financial stress is a common problem for many individuals, and it can have a negative impact on their overall well-being. By providing students with the knowledge and skills to manage their finances effectively, personal finance education can help reduce financial stress and improve mental health.
  4. Improved financial outcomes: Personal finance education can have a direct impact on the financial outcomes of individuals. By learning how to save, invest, and manage debt effectively, individuals can increase their net worth, achieve financial goals, and improve their overall financial health.

Studies have shown that personal finance education can have a significant impact on the financial health of individuals. For example, a study by the Financial Industry Regulatory Authority (FINRA) found that individuals who received personal finance education in high school were more likely to save and invest, and less likely to make costly financial mistakes such as carrying a credit card balance or taking out a high-cost loan.

Personal finance education provides individuals with the knowledge and skills they need to manage their finances effectively, leading to improved financial outcomes and overall well-being.

The Current State of Personal Finance Education in Schools

While personal finance education has gained more attention in recent years, there is still a significant lack of a comprehensive and standardized curriculum for teaching personal finance in schools across the United States. According to a 2021 survey by the National Financial Educators Council, only 24% of high school students in the U.S. are required to take a personal finance course in order to graduate.

Furthermore, there is a significant variation in the quality and content of personal finance education across states and schools. Some schools provide comprehensive personal finance education that covers a range of financial topics, while others offer only a basic introduction to personal finance or no personal finance education at all.

Another challenge is the lack of training and resources for teachers. Many teachers feel ill-equipped to teach personal finance due to their own lack of financial literacy and limited access to resources and training. As a result, personal finance education may not receive the attention and resources it deserves, further perpetuating the cycle of financial illiteracy.

The limitations of the current system for teaching personal finance can have significant consequences for individuals and society as a whole. Without a solid understanding of basic financial concepts, individuals may be more likely to make poor financial decisions that lead to debt, low savings, and poor credit scores. This can have a negative impact on their overall financial health and quality of life, as well as broader economic stability and social welfare.

In the next section, we will explore the case for improving personal finance education in schools and discuss potential solutions for addressing the limitations of the current system.

The Case for Improving Personal Finance Education in Schools

Given the limitations of the current system for teaching personal finance, there is a strong case for improving personal finance education in schools. Here are some of the reasons why:

  1. Changing economic landscape: The economic landscape is rapidly changing, with new technologies, business models, and financial products emerging at a rapid pace. Individuals need to have the knowledge and skills to navigate these changes and make informed financial decisions.
  2. Rising student debt: Student debt is a major problem in the United States, with many graduates burdened with large amounts of debt that can take years or even decades to pay off. By teaching personal finance in schools, students can learn how to manage their debt effectively and avoid taking on too much debt in the first place.
  3. Growing income inequality: Income inequality is a growing problem in the United States, with many individuals and families struggling to make ends meet. By providing personal finance education in schools, we can help level the playing field and provide individuals with the tools they need to achieve financial security and success.

To improve personal finance education in schools, we need to take a comprehensive and standardized approach. This includes:

  1. Increasing funding for personal finance education: Schools need adequate funding to provide comprehensive personal finance education that covers a range of financial topics.
  2. Establishing guidelines for curricula: Guidelines for personal finance curricula should be established to ensure that all students receive a comprehensive education in personal finance. These guidelines should allow for flexibility and diversity in teaching methods and materials to meet the unique needs of different schools and students. By providing guidelines for personal finance education, we can ensure that all students receive a high-quality education that covers essential financial topics and skills.
  3. Providing teacher training: Teachers need access to training and resources to help them teach personal finance effectively.
  4. Leveraging technology: Technology can be a powerful tool for delivering personal finance education, including online courses, mobile apps, and other digital resources.

Improving personal finance education in schools is not just about providing individuals with the tools they need to manage their finances effectively. It is also about promoting economic stability, reducing poverty and income inequality, and improving overall financial health. By investing in personal finance education, we can create a brighter and more prosperous future for everyone.

The Role of Parents and Guardians in Personal Finance Education

While schools play an important role in providing personal finance education, parents and guardians also have a critical role to play. By teaching children about money at a young age, parents and guardians can help instill good financial habits and values that will last a lifetime.

Here are some ways that parents and guardians can promote personal finance education at home:

  1. Start early: It is never too early to start teaching children about money. Even young children can learn basic concepts such as saving, spending, and sharing.
  2. Lead by example: Parents and guardians should model good financial behavior for their children, such as budgeting, saving, and investing.
  3. Use teachable moments: Everyday activities such as grocery shopping or paying bills can provide opportunities to teach children about money.
  4. Involve children in financial decisions: Parents and guardians can involve children in family financial decisions, such as budgeting for a family vacation or choosing a charity to support.
  5. Provide resources and tools: There are many resources and tools available to help parents and guardians teach personal finance at home, including books, websites, and mobile apps.

However, not all parents and guardians have the necessary financial knowledge and skills to teach personal finance effectively. This is why it is important to provide resources and support for parental education on personal finance.

By working together, schools and parents/guardians can provide a comprehensive and coordinated approach to personal finance education that can have a lasting impact on the financial well-being of individuals and families. In the next section, we will explore the broader impact of personal finance education on the future of society.

The Impact of Personal Finance Education on the Future of Society

The impact of personal finance education extends far beyond the individual. By improving financial literacy and promoting good financial habits, personal finance education can have a positive impact on the future of society.

Here are some of the ways that personal finance education can impact society:

  1. Reducing poverty and income inequality: By providing individuals with the tools they need to manage their finances effectively, personal finance education can help reduce poverty and income inequality.
  2. Increasing economic stability: Personal finance education can help promote economic stability by reducing the likelihood of financial crises and creating a more informed and responsible consumer base.
  3. Improving overall financial health: Personal finance education can improve the overall financial health of individuals and families, leading to increased savings rates, improved credit scores, and reduced financial stress.

While personal finance education doesn’t solve all household financial problems, it can have a significant impact on financial behavior and outcomes. For example, a study by the National Endowment for Financial Education found that individuals who received personal finance education were more likely to save and less likely to carry credit card debt. Another study by FINRA found that individuals who received personal finance education in high school were more likely to have higher credit scores and invest in the stock market.

In addition to these individual benefits, personal finance education can have a broader impact on society as a whole. By creating a more financially literate and responsible population, we can promote economic stability, reduce poverty and income inequality, and create a more prosperous and equitable society.

Conclusion

To sum it up, personal finance education is a critical life skill that can greatly impact an individual’s financial stability, quality of life, and overall well-being. Despite its importance, there is a significant lack of comprehensive curricula for teaching personal finance in schools across the United States. This has serious consequences for individuals and society as a whole, including increased debt, low savings, poor credit scores, and reduced economic stability and social welfare.

However, there is a strong case for improving personal finance education in schools. By providing students with the knowledge and skills to manage their finances effectively, we can equip them with the tools they need to achieve financial security and success in the future. Improving personal finance education in schools requires a comprehensive and standardized approach that involves increasing funding, standardizing curricula, providing teacher training, and leveraging technology.

In addition to the role of schools, parents, and guardians also have a critical role to play in promoting personal finance education at home. By starting early, leading by example, using teachable moments, involving children in financial decisions, and providing resources and tools, parents and guardians can help instill good financial habits and values that will last a lifetime.

Personal finance education can have a significant impact on society, including reducing poverty and income inequality, increasing economic stability, and improving overall financial health. By creating a more financially literate and responsible population, we can create a more prosperous and equitable society.

We urge policymakers, educators, parents, and students to work together to improve personal finance education in schools. At Money Fit, we are committed to promoting financial literacy and improving financial health among individuals and communities. We offer a range of free resources and tools to help individuals and families improve their financial knowledge and skills. Visit our website to learn more about how we can help you achieve your financial goals. Together, we can work towards a future where everyone has the financial knowledge and skills they need to achieve financial security.

Resources and References

References:

About the Author

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Rick Munster

Rick Munster is a personal finance expert and author with over 21 years of experience in the credit counseling industry. He currently serves on the board of directors for the Financial Counseling Association of America and has written over 200 articles on personal finance. Rick's expertise has been recognized by several prominent online organizations, which have quoted him on issues related to credit counseling, debt management, and financial education. With more than 20 years of experience at Money Fit, a non-profit credit counseling organization, Rick has established himself as a trusted authority in the field of personal finance.
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NOTE: This sheet is to inform new or returning clients about our services, records, fees, and limitations that may affect you as a consumer of our services. This form also discloses how we might release your information to other agencies and/or regulators. If you do not understand a statement, please ask a Debt Reduction Services (DRS) counselor for assistance.

Debt Reduction Services, Inc. (DRS) has put into place policies and procedures to protect the security and confidentiality of your nonpublic personal information. This notice explains our online information practices and how we use and maintain your information to conduct our financial education and credit counseling sessions and to fulfill information and question requests. This privacy policy complies with federal laws and regulations.

To provide our financial education and credit counseling services, we collect nonpublic personal information about you as follows: 1) Information we receive from you, 2) Information about your transactions with us or others, and 3) Information we receive from your creditors or a consumer reporting agency. We do not share this information with outside parties.

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You hereby authorize DRS, when necessary, to share your nonpublic personal, financial, credit, and any information that you provided (including any computations and assessments produced) with the following entities in order to help DRS provide you with appropriate counseling or guide you to appropriate services: third parties such as government agencies, your lender(s), your creditor(s), and nonprofit housing-related and other financial agencies as permitted by law, including the U.S. Department of Housing and Urban Development.

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Debt Reduction Services, Inc. complies with the privacy requirements set forth in the HUD housing counseling agency handbook 7610.1 (05/2010), including the sections 2-2 Mc, 3-1 H(2), 3-3, 5-3 F, and Attachment A.5. At all times, we will comply with all additional laws and regulations to which we are subject regarding the collection, use, and disclosure of individually identifiable information.

  1. Services: DRS provides the following housing-related services: counseling that includes Homeless Assistance, Rental Topics, Pre-purchase/Homebuying, and Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase); Education courses that include Financial literacy (including home affordability, budgeting, and understanding use of credit), Predatory lending, loan scam or other fraud prevention, Fair housing, Rental topics, Pre-purchase homebuyer education, Non-delinquency post-purchase workshop (including home maintenance and/or financial management for homeowners), and other workshops not listed above.

Please refer to DebtReductionServices.org for details of our services.

  1. Limits: Our services are limited to our normal weekday business hours. We do not provide individual counseling or education services after hours or on weekends, although our education courses are available 24/7.
  2. Fees: We do not charge fees for our financial management counseling and education. However, if you use them, you may have to pay for our Debt Management Program, Student Loan Counseling, Bankruptcy Certificate Services or certain financial education courses (homebuyer education, rental topics, fair housing, predatory lending, and post-purchase-non-delinquency including home maintenance and/or financial management for homeowners).
  3. Records: We maintain records of the services you receive, including notes about your progress or other relevant information to your work with us. You have the right to access and view your records by making a request to your counselor.
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You acknowledge that this authorization will remain in effect for the duration of time that DRS serves as your housing counselor or financial education provider. You also acknowledge that should you wish to terminate this authorization, you will notify DRS in writing.

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Disclosure to Client for HUD Housing Counseling Services

Debt Reduction Services, Inc. and its financial education arm, Money Fit by DRS, offer the following housing counseling and educational services related to housing, personal finance, and bankruptcy certificates to consumers:
  • Housing Education Courses: DRS offers many online self-guided education programs classified as Financial, Budgeting, and Credit Workshops (FBC), Fair Housing Pre-Purchase Education Workshops (FHW), Homelessness Prevention Workshops (HMW), Non-Delinquency Post Purchase Workshops (NDW), Predatory Lending Education Workshops (PLW), Pre-purchase Homebuyer Education Workshops (PPW), and Rental Housing Workshops (RHW). These courses help participants increase their knowledge of and skills in personal finance, including home affordability, budgeting, and understanding the use of credit, as well as predatory lending, loan scams, and other fraud prevention topics, fair housing, rental topics, pre-purchase homebuyer education, non-delinquency post-purchase topics including home maintenance and/or financial management for homeowners, homeless prevention workshop, and other workshops not listed above relating to personal finance and housing. Course details are found below under “Housing Workshops.”
  • Home Equity Conversation Mortgage (HECM) Counseling (RMC): Via telephone and virtual platforms, we offer the required HECM counseling nationwide in addition to in-person counseling in Boise, Idaho. We also offer in-home counseling options in thirty counties across southern Idaho for an additional fee to cover our travel and additional staff time costs.
  • Home Maintenance and Financial Management for Homeowners (Non-Delinquency Post-Purchase) (FBC): Clients receive counseling and materials on the proper maintenance of their home and mortgage refinancing. Clients can find help and resources by phone, in our Boise office, or virtually on all topics related to stabilizing their long-term homeownership.
  • Services for Homeless Counseling (HMC): Clients receive phone, virtual, or in-person (Boise) counseling to evaluate their current housing needs, identify barriers to and goals for housing stability, establish a path to self-sufficiency, and connect with emergency shelters, income-appropriate housing, and/or other community resources (e.g. mental healthcare, job training, transportation, etc.).
  • Pre-Purchase Counseling (PPC): Clients receive counseling through the entire homebuying process. Assistance may involve creating a sustainable household budget, understanding mortgage options, building their credit rating, and putting together a realistic action plan to set and achieve homeownership goals.  Additionally, clients will receive materials and resources about home inspections and other homeownership topics relevant to successfully maintaining a home.
  • Rental Housing Counseling (RHC): Via phone, in-person appointments (Boise, ID), or virtual platforms, clients receive housing counseling relevant to renting, including rent subsidies from HUD or other government and assistance programs. Topics can also address issues and concerns having to do with fair housing, landlord and tenant laws, lease terms, rent delinquency, household budgeting, and finding alternate housing.
DRS also offers the following services:
  • A Debt Management Program (DMP) for consumers struggling to pay their credit cards, collections, medical debts, personal loans, old utility bills, and past-due cell phone accounts;
  • The Budget Briefing and Debtor Education Certificates that are required during the Bankruptcy filing process;
  • A Student Loan Repayment Plan Counseling and application service.

Relationships with Industry Partners

Through such services, DRS has established financial relationships with hundreds of banks, credit unions, and creditors such as American Express, Bank of America, Barclays, Capital One, Chase, Citibank, Credit One, Discover, Synchrony, US Bank, USAA, Wells Fargo, and others.

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The client is not obligated to receive, purchase or utilize any other services offered by DRS or its exclusive partners to receive financial education or housing counseling services. Alternatives: As a condition of our counseling services, in alignment with meeting our client services goals, and in compliance with HUD’s Housing Counseling Program requirements, we may provide information on alternative services, programs, and products available to you, if applicable and known by our staff. Alternative DMP services include negotiating better repayment terms directly with your individual creditors, paying your debts as agreed, or, in extreme cases, filing for personal bankruptcy. Alternative credit and education services can be found through MyMoney.gov or the Jump$tart Clearinghouse of online financial education resources. Housing counseling alternatives can be found through HUD at www.hud.gov/findacounselor.
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Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

Rental, Fair Housing, Predatory Lending / HOEPA, Post-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. credit, budgeting, homeless prevention, debt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).

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Housing Counseling and Education Fee Schedule

 

Online Education Program Fees*

Homebuyer Education Course: $59 per participant

  • Self-paced course available here, our online housing counseling and education center. Certificates will be automatically generated upon completion of the course (approximately 6-8 hours)

Rental, Fair Housing, Predatory Lending / HOEPA, Post-Purchase (Non-delinquency post-purchase workshop, including home maintenance and/or financial management for homeowners) Online Workshops: $49 per participant

  • Approximately 1 hour each

Other Self-Guided Financial Literacy Webinars (e.g. credit, budgeting, homeless prevention, debt prevention): $0

One-on-one Counseling Fees*

Pre-purchase Homebuying Counseling, Rental Counseling, Post-purchase Ownership Maintenance and Financial Management: $75

  • Session by the hour

Reverse Mortgage/HECM Counseling with Required Certificate:

  • $200†

Credit Report Fee: Paid Directly by Client

*Fees for all but our online education courses and workshops can be paid online by debit card, credit card, or PayPal or in person by cash, check or money order to: “Debt Reduction Services, Inc.” Registration fees are non-refundable 24 hours or less before the start of an in-person course or workshop. Certificates are non-transferable

*Fees may be waived for households with income of 150% or less of that identified on the US Department of Health and Human Services Poverty Guidelines Page

†Home visit counseling is available in 30 southern Idaho counties for potential HECM borrowers at additional costs to cover our travel (IRS reimbursement rates apply) and staff time ($50 per hour or fraction there).