The importance of financial literacy in schools

My topic today is the importance of financial literacy in schools. I chose this subject because I think
it’s something relevant for young people nowadays.

It’s not a secret that our educational system has many flaws, one of them being the lack of financial
education. Anyone who’s ever struggled with a difficult class in high school has asked the question:
will I ever actually use this stuff after I graduate? Well, obviously, not all of us will need to use
quadratic equations or physics formulas on a daily basis. But one thing is for sure: we will need to
know how to handle money wisely. This is why I think teaching financial literacy in schools is very
important.

So, what is financial literacy? Financial literacy classes teach students the basics of money
management such as budgeting, saving, debt, and investing. That knowledge lays a foundation for
students to build strong money habits early on and avoid many of the mistakes that lead to lifelong
money struggles. Now, you may raise the question: but we do study economics in high school, isn’t
that enough? My answer is yes, all schools have economics in their curriculum but financial literacy
is a completely different subject. In economics, we learn about supply and demand, market
competition, price control, unemployment, and inflation among many other topics, which are all
indispensable. However, no one teaches us seemingly simple things like how to do a budget, keep
track of your expenses, pay the bills, get a loan or make money as a student. People end up learning
about money through their experiences, some of them being very painful. A lot of the money
problems adults are facing could have been avoided if financial literacy was taught earlier, in school.

So what advantages are there to learning money principles as a student rather than as an adult?
Well, students who learn personal finance principles early have the most time to apply what they
know, getting the most out of their knowledge. Even better, many personal finance students apply
what they learn right away—while they’re still in high school. For example, according to a survey
done in the United States, nearly two out of three high school students who had taken a personal
finance course reported they were already earning an average of $3,000 a year. A high majority of
the same group said they were in the habit of creating monthly budgets for their money. And 20%
already owned a car they paid for themselves! Financial education also prevents serious money
management mistakes to be done later in the future. That’s why the basics of personal finance
should be taught in high schools everywhere, right alongside other basics like reading and math.

Another key question is how should financial literacy be taught and what should be integrated into
the curriculum? In my opinion, to help students make truly informed financial decisions after
graduating, it’s important to teach them the basics, like interest rates for loans and credit cards.
Students should also understand the value of investing and the importance of saving for retirement.
Many experts agree that one of the most critical components of successful education on these topics
is hands-on experience or, at a minimum, technical simulations. For example, some schools in the US
have adopted a very interesting teaching method: each student is given a simulated salary of
$65,000. They have payday on Monday and bills due each Friday. Students also have to complete
different tasks which require spending money and it is very important to maintain a positive account
balance. Another example is the “Stock Market Challenge” presented by US Bank. It gives students
the real-world experience of working on a Wall Street “trading floor.” (Wall Street is a famous street
in the Financial District of New York). Each team starts with a specific amount of money to buy initial
stock holdings and then buy or sell shares, to reach the highest net worth in their investment
portfolios. This type of program offers students the chance to engage in real-world experiences that
will help them develop the financial skills they need to succeed.

So, to conclude my speech I would like to emphasize once again the importance of teaching financial
literacy in schools. Students will only benefit from making healthy financial choices, starting at a
young age. The key is realizing that our nation’s economic tomorrow depends on the financial and
business skills we give to young people today.

Thanks for listening to me and you can ask me if you have any questions.