Why Young People Get in Debt Before They Know Why

Many people think that high schools should offer classes that better prepare young people for their future. Too many students are graduating without understanding the basics of banking, loans, credit, or even how to write a check. This can lead to problems with finances early in life that takes years to correct. Young people are bombarded with credit card offers before they can understand interest rates. Several educators believe the only way to correct this is to focus on learning these things in high school as a mandatory class. In a report by USNews.com, entitled “Why Most High Schoolers Don’t Know How to Manage Their Money“, Daniel Bortz explains that high schools require technology credits and math credits but do not teach students how to use information from these classes to understand financing needed technology for college. 

Why Young People Get in Debt Before They Know Why

How High Schools Can Teach Money Matters

High schools need to require a financial literacy curriculum for a graduation requirement. The curriculum needs to teach students how to open and manage a checkbook. They need to learn about online banking and how to pay bills using this technology. Part of the curriculum will teach credit dos and don’ts, buying cars, and about credit cards. Students will leave the class understanding how interest rates affect payments and long-term paybacks. Students should leave this class with the knowledge to fill out their own financial aid applications for college or job applications if they do not want to go to college. 

Teach Students How to Read a Paycheck

Many young people struggle with the idea of money. They do not understand that when they make a wage then they will not get every penny earned. They do not consider that they will have federal and state taxes and several other deductions to their paycheck. Young people need to be taught about the working world before they are exposed to real-world situations. New high school graduates may set up a life situation that will have them needing more money than they receive if they do not understand money matters before this happens. Although there are those who believe that money matters are a parent’s responsibility, the schools should share in this charge to give a well-developed curriculum for all students. After all, some students do not have parents or have parents that are still struggling to understand these things on their own. 

Teaching Real-World Money Situations In School

A good addition to the high school program is to have students research a job that they would enjoy and then research the education required for that job. This can be done with career and interests surveys. Next, they must decide the type of car, home, and monthly bills that they will have and research the average cost of these additions. They must consider student loans if they will have them, and other costs that they will occur such as insurance, clothing expenses, and entertainment. After all, this is taken into consideration, students must calculate the money they make minus the expenses they will have and see where they are and where they need to be. This can help to prepare young people for what they will encounter in post-graduation society. 

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