Financial literacy is a basic life skill and a need to know

////Financial literacy is a basic life skill and a need to know

Financial literacy is a basic life skill and a need to know

  • One in five teenage students in the U.S. lack basic financial literacy skills, data from the Program for International Student Assessment (PISA) showed.
  • Financial literacy is a basic life skill that is more than a nice to know, it’s a need to know. And now it’s more relevant than ever.

Not everyone aspires to be an investment manager when they leave school, but the core elements of financial literacy should be common knowledge.

This is particularly true today, in an increasingly global economy where people are spending more and living longer. Understanding how to manage personal finances is critical for anyone, and it helps to start young.

Unfortunately, we are not quite there yet. One in five teenage students in the U.S. lack basic financial literacy skills, data from the Program for International Student Assessment (PISA) showed. Among adults, only 20% of those polled by the Financial Industry Regulatory Authority (FINRA) in a study said they were offered and have participated in some form of financial education. It seems the country has a lot of work to do on the financial literacy front, and many teachers appear to agree.

About 89% of Kindergarten through grade 12 teachers surveyed by the National Endowment for Financial Education (NEFE) said that students should either take a financial education course or pass a competency test for high school graduation. Some states have taken this a step further and made personal finance courses a requirement for high school students. However, getting to where we need to be in financial literacy as a nation will take substantial effort.

Right now, only 17 states require personal finance courses, according to the Council for Economic Education’s Annual Survey of the States. One reason for the gap could be the lack of teachers with the necessary background to teach personal finance topics, as only 20% of teachers in the NEFE survey said they believed they are prepared to do so if given the opportunity.

While progress is slower than we would like, we believe these steps are evidence that there are others who believe in the importance of financial literacy and preparing people during their youth to make informed financial decisions.

CEO of the National Financial Educators Council Vince Shorb has said, “College graduates spent 16 years gaining skills that will help them command a higher salary, yet little or no time is spent helping them save, invest and grow their money.”

Former Chairman of the U.S. Federal Reserve (Fed) Alan Greenspan noted it once too. He believed that the number one problem in today’s generation and the economy is a lack of financial literacy.

So how do we continue to build on the steps that have already been taken in financial literacy in the U.S. and move it forward? One method that we have found to be an effective way to get students engaged and learn about financial literacy is through an investment challenge known as the KWHS Investment Competition.

Read more at Business Insider UK