Many high schools today focus on the core subjects such as mathematics, sciences, languages and history; however, they fail to teach students a fundamental life skill of managing their personal finances. According to the U.S. Census Bureau, “an average U.S. Household owed $8,249 in credit-card debt” and “college students were $3,262” in debt upon graduation which, is astounding considering most credit card companies charge a monthly interest rate of 19.5%. Banks are essentially robbing their clients’ money at the interest rate they are charging; therefore, it is crucial that high schools integrate money management classes into their curriculum to educate students before they leave high school. In addition, to make profit, the Student Loan Industry engaged in unethical business practices by lending students large amounts of money based on what college the student planned to attend rather than on their “credit worthiness.” To protect students from being victimized by the Student Loan Industry, New York passed the Student Lending Accountability, Transparency and Enforcement Act back in 2007.
To reiterate the importance of teaching money management, I was shocked to discover that in the year 2006 “there were a total of 597, 965 non-business bankruptcy filings” according to the U.S. Courts Bankruptcy Statistics. In my opinion, this illustrates the point that people don’t fully understand how to manage their personal finances and may be living from paycheck to paycheck while paying high interest rates to the banks etc. when they should be looking into investing their money in order to receive compound interest. Individuals investing 10% of their monthly paycheck into these savings accounts can benefit greatly in the long run as money has the capability to grow exponentially if invested wisely.
This YouTube video reveals how high school students have already started to pile on debt. In response to this, Ohio students will eventually have to take mandatory money management classes in order for them to graduate. This is an exceptional idea, as it will teach students how to properly invest their money and PROTECT them from unfair loan practices.
Links:http://bucks.blogs.nytimes.com/2009/12/29/resolved-better-money-management/
http://www.moolanomy.com/161/why-not-teach-money-management-class-in-high-school/