Personal Finance: 4 Reasons Our Students Should Learn it in School

When people don’t have a basic understanding of personal finance, the results can be devastating. The negative impacts aren’t just felt by the individual, but also by their family members and community. If students were learning personal finance in school, they wouldn’t find themselves in these terrible positions as adults. Still not convinced? Here are 4 reasons students must learn personal finance.

1. It is a Practical Life Skill

Not only is understanding personal finance a necessary life skill, it is a skill that kids need to learn as early as possible. By the time they are 16, many kids own cars, have jobs, and bank accounts. This means budgeting for gas and car insurance, reconciling bank statements, tracking expenses, and filling out tax forms. Once they are 18, students may be renting apartments and receiving credit card offers. There are students who will receive help and guidance from their parents on these matters, but unfortunately many will not. If these skills aren’t learned at home, they simply must be taught in the school.

2. Students Who Learn Young Are Less Likely to Develop Bad Habits

A large part of personal finance education is teaching young people to track their spending, to create and stick to a budget, and to spend money. Students also learn about credit, interest rates, and how to identify a good offer of credit and one that is predatory. These programs also teach students about investments. Ultimately, students who are well educated in personal finance know…

  • The importance of saving money for emergencies
  • How to budget so that they do not run out of money
  • The importance of investing for their retirement
  • How to determine whether or not an interest rate is fair
  • How to avoid predatory creditors such as buy here pay here retailers, pay day and title lenders, pawn shops, and high interest credit cards
  • How to set savings goals to pay for wanted items and experiences

How to resist temptation to borrow money or purchase things on credit that are not absolute necessities

3. Too Many Entities Prey on Students who Lack Financial Knowledge

It is a well known fact that finance companies target students with credit card offers. These marketing campaigns often began the moment the student turns 18. These companies use slick marketing tactics to appeal to young people. They promise students the ability to get what they want now and pay for it later, and they do so by depicting images of young people living the good life. Students are offered low introductory rates which often jump into the double digits after just a few short months. Students who do not understand how credit works can find themselves in thousands of dollars in debt by the time they graduate. Much of this can be avoided with just a bit of education.

4. Students Who Do Not Learn These Skills Are at Risk of Financial Abuse

Students who receive education in personal finance are more likely to remain in control of their own money, and they are more likely to recognize and put a stop to financial exploitation and abuse if it happens to them. This means they are less likely to fall victim to unscrupulous contractors, or duped by other con artists. Students who have this knowledge are also more likely to have their own bank accounts, and to establish a healthy credit rating. This financial independence makes it easier for them to leave abusive situations, and less likely to allow an abusive partner to control their finances.

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5 Personal Finance Books to Add to Your Reading List

What have you been reading this summer? Every person reading this post likely has a different answer. Some prefer lightweight reads in the summer months such as young adult fiction or romance novels. Other prefers historical fiction, political satire, or biographies. Maybe sci-fi and fantasy are more your speed. Whatever you have been reading, hopefully you’ve enjoyed it.

Now, let’s talk about a few books you should be reading as your autumn closes out. When it comes to personal finance books, everybody could use a little bit more information, and a little more education. Whether the authors are giving advice on saving money, living on a budget, or investing, books on personal finance are great additions to anybody’s summer reading list.

This is why we have put together this list of 5 books on personal finance that you should read before the weather turns cold.

Women and Money – Suze Orman

Suze Orman has provided insightful financial advice to people for decades. She continues this pattern with “Women and Money”. Suze Orman recognizes that when it comes to money women need both education and empowerment. This book includes a 5 month program that helps women establish financial independence and personal freedom. Many books provide a lot of heady, high level information.

Ms. Orman takes a more practical and relatable approach providing women with specific steps that they can take towards improving their financial situations.

Why didn’t they Teach me this in School: 99 Personal Money Management Principles to Live – Cary Siegal

Cary Siegal wrote this book upon realizing that his children and their peers would graduate from high school and college without any formal, personal finance education. In spite of covering 99 principles, this book is quite easy to read and the lessons are conveniently parsed out.

This book targets young adults, but there is valuable advice here for any age group.

The Success Principles: How to get from where you are to where you want to be – Jack Canfield and Janet Switzer

Do you have plans and life goals that you have yet to achieve? Maybe you would like to start a business or go back to college. Whatever your plans are, it can be easy to feel stuck where you are, and getting to a place where you have achieved your goals can seem impossible.

This book is a goal-oriented book that gives financial advice that relates to conquering your next challenge. The authors include daily action steps, ways to increase your confidence levels, and practical advice on living in the modern age.

Rich Dad Poor Dad – Robert Kiyosaki

Rich Dad Poor Dad is a book about money lessons learned from two different men and the influence those lessons had on the author. The lessons he learned from the rich dad in the novel gave the author the opportunity to retire before the age of 50. In this book, he passes that knowledge on to others.

Many readers will be surprised to find that what they have been taught about money is completely off base.

Total Money Makeover – Dave Ramsey

Dave Ramsey is a well-known author, financial guru, and a nationally syndicated radio talk show host. Ramsey has a very easy to read writing style, and provides a lot of great practical advice to his readers.

The best endorsement of Ramsey’s is advice is simply the success that his readers and listeners have achieved by following his advice. Many are put off by Ramsey’s tendency to be extreme in his rhetoric, and that is a valid criticism. However, if that can be ignored in favor of focusing on just his financial advice, readers can learn a lot.

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