Youth and Money Matters

When you were in middle or high school, did you learn money basics? Did you take a personal finance class? If so, you were among the less than half of Americans who did. Today, only 17 states require high school students to take a personal finance class before they graduate, and only about six test students on what they’ve learned.

As April was National Financial Capability Month, it was the perfect time for the Department to turn its attention to financial literacy for youth and what it could do to promote best practices and support a network of policymakers and practitioners across the country

The Department, in partnership with the Financial Literacy and Education Commission (FLEC), organized a special convening entitled “Financial Education in America’s Schools.” The goal was to engage the education community, local and state stakeholders, financial institutions and others in building strong, permanent partnerships that immerse youth in financial concepts.

In addition, the Department encouraged states to participate in the Programme for International Student Assessment (PISA), an international survey administered to 15-year-olds that includes a component on financial literacy. PISA results for 2015 showed that students who had a bank account scored higher than their peers who didn’t have one.

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Bank Accounts, Student Loans, Credit Cards, Oh My!

In addition to covering my United States Government and Politics curriculum, every year I put my students through a mini “adulting 101” bootcamp. During the first semester of school we focus on basic “adulting” skills like registering to vote, laundry care, vehicle maintenance, building a resume, meal planning, cooking, etc.

During the second semester, I focus on four financial basics that establish a foundation for these students to become financially literate adults.

  • The basics of banking includes checking accounts, savings accounts, writing checks, money orders, cashier’s checks, fees and setting up automatic payments.
  • Understanding credit, credit cards, fees and penalties, interest rates, repayment and credit scores.
  • Borrowing money, interest rates, repayment options and debt.
  • Budgeting, saving and investing.

Initially when I narrowed the focus of the financial literacy portion of my “adulting 101” curriculum, I reached out to my local bank for information and resources. They not only provided me with free resources, they also offered to present to my students. This was an awesome opportunity for a financial professional and community partner to answer questions and provide insight to these young adults getting ready to start the next, but for most, the first financial chapter of their lives.

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High School Students Take a Unique Approach to Financial Education

April is Financial Capability Month. To help mark this occasion, two students offer their perspectives on their very different experiences in obtaining financial education.

 

Picture shows high school student Samuel Gelb sitting in front of some pine trees.

Samuel Gelb

Growing up, I’ve been fortunate enough to have a father who has educated me on fundamental financial principles. In my house, terms like P/E ratios, EBITDA, ROI and diversification are a part of our regular vocabulary.

From selling lemonade as a young child to buying my first stocks at age twelve, business, entrepreneurship and finance have always been a part of my life. Seeking to expand my love of investing to others, I co-founded an investment club at my school called “The Blake Asset Management Group” in an attempt to give my peers and me a chance to test our investment acumen in a real-world setting.

While I expected our club’s first meeting to revolve around potential investment ideas, I was surprised to see that most of those in attendance actually knew little about stocks, and even fewer knew how to analyze a stock at the most rudimentary level. Most surprising was the number of students who lacked an understanding of broader and more important general financial literacy concepts like interest, diversification, and the importance of saving.

Recognizing that it would be difficult to run a club where few members possessed the necessary knowledge to invest, the leadership team and I restructured our club’s focus. We decided to measure our success not by the investment profits we generated but rather by the number of students we educated. Consequently, I designed and created a financial literacy course and made it available to all students at my high school.

The initiative, which was taught through the club, was a major success. Due to strong demand, what was initially intended to be a 5-week course turned into a 12-week class with interactive lesson plans and guest speakers. Students gained a thorough knowledge of basic financial concepts.

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5 Ways to Cut the College Price Tag

Working as a Financial Aid Counselor, families often ask me how they can pay for college. More often than not this conversation takes place during the student’s senior year in high school. As a first-generation college student, there are things I wish my family and I had known to help us save on our college bill. These are a few things that families can do to help cut the cost of college:

1. Community colleges can be great options

Community college offers the most affordable education out there. At community college you can complete the general education classes that every school requires, and then transfer to a 4-year school where you can take classes specific to your major. Also, community college is a great place to gain technical skills and earn a short-term certificate to get you started in the workforce.

2. Buy used textbooks or rent them

Buy used books or check to see if you can rent textbooks at your school or online. After the class is over, sell your books back online, to the bookstore, or to someone else.

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Help Secure Your Future by Discovering Financial Literacy Resources Available to You

Note: April is National Financial Capability Month.

On August 28, 2017, I accepted an offer to work with the U.S. Department of Education’s  Office of Federal Student Aid (FSA) through the State Department’s Virtual Student Federal Service (VSFS) internship program. I imagined that I’d be doing typical intern duties, but didn’t foresee how much I’d learn about financial literacy, or the level of understanding I would gain on how to earn, manage and invest money.

I didn’t even know that this was a skill or area of study before last August, and as a third-year undergraduate student at Yale, I wish I could have learned sooner about financial capability – making informed decisions about college access, applying for aid, budgeting and borrowing and managing debt.

Financial literacy, or financial capability, is a very important area of study. Included in the Secretary’s Final Supplemental Priorities for Discretionary Grant Programs from the U.S. Department of Education is a priority area for “[s]upporting instruction in personal financial literacy, knowledge of markets and economics, knowledge of higher education financing and repayment (e.g., college savings and student loans), or other skills aimed at building personal financial understanding and responsibility.”

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