States push for high school financial education
Learning to manage money as a teenager could lead to wise decisions in adulthood.
Have you ever accumulated a credit card note that you have had to pay off over time? Have you had to push back a utility bill and incur late fees because money was running out? Sometimes these circumstances can’t be helped – say, in the case of layoffs or emergencies – but a lot of Americans go into debt because they don’t know the details of money management.
Some lawmakers are trying to change this. And if they do, it could save many people a world of financial suffering.
Trained in money management
So far this year, 25 states have introduced legislation to add personal finance instruction to high school curricula. In Arkansas, Hawaii and Nebraska these bills have been enacted and in a few other states they are awaiting a governor’s signature. The purpose of these bills is to teach Americans about money management at a young age, so that by the time they enter the workforce, they know a lot about money management.
What might a personal finance course consist of? On the one hand, it should, ideally, explain the importance of having emergency savings. Unexpected bills can pop up out of nowhere, and without money in a savings account, those bill recipients can easily get into debt. Workers are generally advised to save three to six months of essential living expenses to cover unforeseen expenses or a long period of unemployment – something that has unfortunately been the reality of many people in the coronavirus pandemic.
Another lesson that is important? The art of budgeting. Without a budget, you might not know where your money is going each month, or what your spending actually looks like. Following a budget can be the way to avoid debt, build savings, and reach bigger financial goals.
Finally, it is important to understand the dangers of credit card debt. A lot of people are racking up credit card notes, thinking they’ll pay them off on time and have a bit of a break, not realizing how much interest they’ll accumulate in the process – and how much they could damage their money. credit.
A positive sign
For some states, bills calling for personal finance training are only in the introductory phase and their passage is not guaranteed. But the fact that lawmakers are focusing on financial education is positive.
Many people’s finances were destroyed when the pandemic struck and they had no cash reserves to fall back on. Teaching people how to save, budget, and plan for the unexpected could save countless Americans the heartache of a future crisis, even if it doesn’t come close to the impact of the coronavirus pandemic.
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