Taking a financial education class in high school can be beneficial.
In fact, a recent report from consulting firm Titon Partners and Next Generation Personal Finance, a nonprofit organization focused on providing financial education to mid-career and mid-career individuals, found that a one-semester course in personal finance Once completed, each student will earn approximately $100,000 over their lifetime. high school student.
According to co-founder Tim Lanzetta, much of that monetary value comes from learning how to avoid high-interest credit card debt and leveraging a better credit score to finance things like insurance, auto loans, and mortgages. This is achieved by securing preferential borrowing rates for important expenditures. The next generation of CEOs.
But there are also knock-on effects, he added.
“Students are taking these lessons home with them,” Lanzetta said. “When you multiply that $100,000 in savings by his family and community, it becomes an incredible economic driver.”
Personal Finance Details:
Why transfers from community colleges often fail
Impact of affirmative action decisions on university applicants
Biden administration cancels $4.9 billion in student loans
“You can teach students the value of having a savings or checking account, and you can share that with their parents,” said Kelly Herrud, who has taught personal finance at De Pere High School in Wisconsin for 18 years. I can do that,” he said. This is the so-called “trickle-up effect.”
“Gaining this basic knowledge is powerful,” she said.
Meanwhile, there is a growing trend of personal finance classes within schools.
As of 2024, half of all states already require or are in the process of requiring high school students to take a personal finance course before graduation, according to the latest data from Next Gen.
Plus, there are 35 more personal finance educations. Bills are pending in 15 states, according to Next Gen's bill tracker.
Many studies show that there is a strong link between financial literacy and financial well-being.
“The research is huge,” Lanzetta said.
Research shows that students who are required to take personal finance courses from a young age are more likely to use low-cost loans and grants to pay for college, and less likely to use private loans or high-interest credit. It is said that it is unlikely that people will become dependent on the card. Research by Christiana Stoddard and Carly Urban for the National Endowment for Financial Education.
Students are also more likely to enroll in college if they know the financial resources available to pay their tuition.
“Our results indicate that high school financial education graduation requirements can have a significant impact on major students' financial behavior,” the authors said in their report.
Additionally, data from the Investor Education Foundation, a financial industry regulator that promotes financial education, shows that students who take financial literacy courses have higher average credit scores and lower delinquency rates as young adults.
Additionally, a report from the Brookings Institution found that financial literacy among teens is positively correlated with wealth accumulation and net worth by the age of 25.
I tell them this will be the most important class they will ever take in their life.
christopher jackson
Personal Finance Teacher at Da Vinci Communication School
Christopher Jackson, who teaches personal finance to 12th grade students at Da Vinci Communications High School in Southern California, said, “From telling my students that my number one goal is to impact their children, We are starting classes,” he said.
“I tell them this is going to be the most important lesson of their lives,” Jackson added.
As part of Jackson's course, students open a Roth Individual Retirement Account with an initial grant of $100, and many then maintain the account on their own.
Among adults, those with higher levels of financial literacy are more likely to manage a typical month, are more likely to repay their loans on time and in full, and are less likely to be debt-constrained or considered financially vulnerable. will be lower.
They're also more likely to save and plan for retirement, according to data from the TIAA Institute-GFLEC Personal Finance Index, which is based on several years of research.
“The need is real, the impact is real, and that's what motivates me as a teacher,” Jackson said.
Subscribe to CNBC on YouTube.
Don't miss the next story from CNBC PRO.
