Financial Education for the Younger Generation

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( — July 13, 2017) Syosset, New York — 

It may no longer come as a surprise to anyone that Millennials do not have an excellent grasp on the management on their money. Studies suggest that even with greater financial burdens from economic uncertainty and student loans, they are still lagging behind in basic financial education.  

According to a nationwide study, 80% of Millennials (the generation born between 1982 and 2004) hope to purchase a home but lack financial literacy and the substantial amount of cash needed for a down payment. 

And while there are examples of some schools and universities now offering financial literacy in their curriculum, it clearly isn’t enough. A recent survey found that 87% of all Americans believe that financial literacy should be taught in school. And that sentiment is echoed in the feelings of Millennials themselves. The same survey showed that 60% of young people feel that a financial literacy test should be a requirement for high school graduation. 

The problem may be that in the minds of the students, there is no clear and applicable use for an education in fiduciary skills. And we all know what happens to a subject when we have no clear use for it. It tends to die away in an individual. For example, when was the last time you used an equation from algebra? 

Why should students learn about balancing a checkbook when they don’t have a checking account yet? It’s the equivalent of those who have no interest in becoming an engineer. Why would they have any need for learning about calculus? 

So while budgeting, debt, savings, and other personal financial basics may be essential tools to a grown adult in the workaday world, these subjects are unlikely to motivate the interest of a high school student who still relies on his/her parents to make these kind of financial decisions for them. 

Perhaps a “financial driving test” should be implemented before any student loans are approved. This might sound like a crazy idea, but think of the consequences. If a student is not able to pass a basic personal financial test, then they won’t be approved for a student loan. How many millions of dollars would be saved? How many educated or semi-educated students would be the result? It may not be that crazy an idea after all. 

And it would force parents, students, and teachers alike to engage in the subject in a far more meaningful way with real life application staring them in the face.



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About David Lerner Associates

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