The lack of financial literacy in the country is no surprise. However, the extent to which people are unaware of common financial terms is something I find shocking.
During a conversation with my sister the other day, it became increasingly apparent that our nation’s young people are no better equipped to handle their finances than the people who are currently drowning in debt. The conversation went like this:
My sister: “Well, her house is paid off so they are just paying the mortgage and other bills.”
Me: “What? That doesn’t make sense. Why is she paying a mortgage if her house is paid off?”
My sister: “Umm … hmmmm … Wait! What’s a mortgage?”
Despite the overwhelming national debt discussions, and a crisis that continues to grip the housing market, the people who should be learning lessons from these situations simply aren’t paying attention.
At least my sister isn’t.
This question may be understandable if my sister were, oh I don’t know, in middle school, perhaps. But she’s not. She’s not even in high school. She is a college graduate who recently completed a thesis on the topic of conflict resolution in Telangana, India.
Pretty scary, isn’t it?
Luckily, there’s some good news.
Beginning this school year, four states – Utah, Missouri, Tennessee and Virginia – are requiring high-school students to take a course devoted to personal finance in order to graduate.
In addition, twenty other states will now require that personal finance to be incorporated into other subjects, such as math.
According to a 2011 Teens & Money Survey, 86 percent of 16-to-18-year-olds said they would rather learn about money management in a class than make financial mistakes in the real world.
So as the new school year begins, make financial education a priority for yourself and your family. You’re never too young – or too old – to learn more about responsible money management.
Head over to MMI’s financial education and budgeting tools sections and start studying!
(It’s actually kind of fun.)