Why Students at AJA Need a Financial Literacy Course
Americans are “financially illiterate” because most schools do not teach personal finance. Unfortunately, AJA is one of those schools. Financial literacy is a fundamental life skill that is as important as being able to read and write, yet it has been ignored by our school. We are forced to learn trigonometry, yet how many of us will ever use it again after graduation? In contrast, how many monetary transactions will we each conduct on a daily basis for the rest of our lives?
Financial illiteracy means the lack of essential financial knowledge and fundamentals.
In fact, millions of financially illiterate Americans are just one paycheck away from financial disaster. Contrary to popular belief, this deficit affects all income levels. Nearly half of Americans making more than $100,000 a year live paycheck to paycheck, meaning they are spending almost all of their paycheck on monthly expenses.
Additionally, because so many Americans lack a financial education, a majority of families in the U.S. do not have an emergency fund — money put aside to weather the occasional crisis, such as a health complication, a car repair, or a job loss. This fund should contain money sufficient to cover three to six months of expenses, but the Federal Reserve found that 40% of Americans cannot even afford a $400 emergency expense.
Today, Americans are facing another unexpected expense — skyrocketing gas prices, and because they do not have money saved, according to the U.S. Census Bureau, close to a third of Americans have had to cut back on basic household necessities such as food and medicine in order to cover this growing cost.
Financial illiteracy also has devastating associated costs. In 2021, Americans lost more than $350 billion dollars in unnecessary banking fees and high interest rates, according to the National Financial Educators Council. Financial illiteracy also has social-emotional costs, the stress of managing finances without the necessary skills causes divorce rates to soar, families to rupture, and women to stay with abusive men for financial security. Name any situation and it goes back to money.
Unfortunately, if our students are not taught personal finance at AJA, they might not learn it elsewhere. Studies show that most students do not learn about money management from friends or family. People often do not talk about money with their coworkers, friends, and even their spouses. This phenomenon is called the “money taboo.” People are more likely to discuss their love life with strangers than their financial decisions. This taboo also permeates the home. Parents often do not discuss money management with their children as a result of their own financial insecurities, leaving their children uninformed and unprepared.
When I saw the pandemic’s devastating financial effects on millions of Americans – people waiting in food lines for the first time because they did not have any savings – I realized that I needed to do something to help my classmates avoid this fate because our school does not offer a personal finance course. This epiphany prompted me to launch the Financial Literacy Club. This club provides high schoolers at AJA the opportunity to learn basic personal finance — such as, the importance of having emergency funds, having good credit, and managing credit cards — in order to become financially literate before they go off to college. This club has great participation, with 20% of the school attending; however, attendance is voluntary and only so much can be covered in a short club period.
Respectfully, AJA is long overdue to offer this essential financial education. Recently, the state of Georgia passed a law requiring all public high school students to take a personal finance class. These classes have a proven positive effect: the FDIC found that people that completed a financial literacy program are significantly more likely to “have a checking account, budget wisely, save for retirement, and more.”
Bottom line, we need AJA to offer a personal finance class as part of the required curriculum. It is essential to begin this foundational education with us as teens so that we can avoid financial pitfalls as we enter the real world, rather than having to clean up our missteps as adults.
The unfortunate reality is that, if the school continues to ignore the need to teach basic personal finance, many of AJA’s students will find themselves, as adults, facing financial ruin with insurmountable debt, no savings, and bad credit. This deficit can be fixed simply by requiring students to take a personal finance course. As a community, we need to ensure that this essential skill is taught so that our students are well prepared for anything that might befall them, even a once-in-a-100-year pandemic.