Financial literacy is a vital life skills that is critical in achieving professional and personal success in today’s environment. Young people quickly have to make more difficult and significant financial decisions after high school (Erner et al., 2016). Unfortunately, a lot of young people graduate from high school without having a strong grasp of fundamental financial management. However, they know where to take my online French class. According to a 2020 survey conducted by the National Financial Educators Council stated that 60% of adults in the United States said they got no formal financial education during their K-12 education. Young children who get financial education will be better equipped to make wise decisions, stay debt-free, and create a secure future. We will examine the key financial literacy that every high school student must have in more detail.
Saving And Emergency Funds
One of the most important financial practices that students should develop at a young age is saving. Students can still learn the importance of setting up a percentage of their earnings, even if they have minimal salaries. Just like they prioritize take my online Spanish class, they should also prioritize saving as a critical aspect of life. Teaching a saving mindset can be achieved by teaching the value of “paying yourself first” by dedicating a portion of any income. Teachers can only teach these things to students. Teachers are viewed as the source of information since they provide lessons to students (bestassignmentwriter, 2022).
Considering the importance of an emergency fund is a crucial component of saving. However, high school students do not have many expenses but having an emergency fund might help them cover any unexpected expenses like auto repairs or medical bills without needing assistance from others. Students should learn that having an emergency fund is a lifelong habit that will protect them from unexpected situations.
Understanding Debt And Credit
Understanding credit and debt is one of the most crucial financial literacy lessons. Many high school students do not understand how debt, especially credit card debt, can affect their lives in the long run. High-interest debt has the potential to rapidly get out of hand, which leads to excessive stress and trouble making monthly payments. The difference between “bad debt” (such as high-interest credit card debt that can end up in a significant financial burden) and “good debt” (such as student loans or housing loans, which are investments in their future) should be taught in every school to students.
Additionally, it is necessary that students understand the concept of credit ratings and how they are determined. They should be aware that their credit score is determined by elements such as payment history, credit use, and credit length. They will be able to get better loan rates with a good credit score, which will ultimately save them money. It’s also important to teach them how to use credit cards responsibly. Students should know that paying off balances in full each month will prevent interest fees and debt building.
Investing Basics
High school is a perfect time to teach students the basics of investing, even if it looks complicated to teach. Understanding the fundamentals of investing, an effective strategy for creating financial security over time can assist students in making wise future decisions. It is important to understand concepts like the difference between stocks and bonds, interest rates, and risk versus reward.
Teaching students about the power of compound interest and explaining with examples from everyday life how even small investments can increase significantly over time is an easy method to introduce investing. The possibility of financial gain is another reason why many students are interested in investing; however, they should be warned about the risks, especially when making high-risk investments. Students can start building a stable financial future by learning how to analyze investments and understand the value of diversity.
Understanding Paychecks And Taxes
Taxes may not be an exciting subject, but understanding them is important for financial literacy. Students in high school who work part-time jobs must be able to read their paychecks and understand how Social Security, Medicare, and state and federal taxes are deducted. Understanding how taxes operate is crucial to determining one’s net income because they are a necessary part of life.
Even if students fail to submit taxes on their own straight away, it might still be useful to teach them the fundamentals. They must understand the operation of tax rates and the reasons behind tax deductions. Teaching concepts such as tax credits, deductions, and refunds will help them deal with taxes as adults and avoid confusion when they start working full-time or running their own businesses.
Establishing Budgetary Objectives
Setting goals is yet another crucial financial skill that students should learn. When there are no objectives, it is easy to forget about long-term financial stability. One excellent place to start is by teaching students how to create SMART goals, which stand for Specific, Measurable, Achievable, Relevant, and Time-bound.
Students can allocate their money more wisely if they understand how to develop reasonable financial goals. It is a practice that encourages students to develop financial discipline and make sacrifices now in order to reap more benefits later. Setting goals also helps people feel more responsible and purposeful when making financial decisions, which can stop reckless spending and promote careful money management.
The Importance Of Financial Planning
Budgeting is only one aspect of financial planning but another is developing a plan for reaching financial stability and life goals. Students in high school should understand that financial planning is a continuous process that will vary as their goals, responsibilities, and income change. Students who are taught to look beyond their immediate needs and want to develop a financial future-oriented perspective.
An introduction to various financial instruments, such as insurance and retirement accounts (such as 401(k)s or IRAs), can help students understand the value of making long-term security plans. Students who grasp these concepts at a young age will be better prepared to manage money when they reach maturity and start making important life decisions, such as saving for retirement or purchasing a home.
Conclusion
Every high school student should become financially literate before doing the job, pursuing further education, or taking on personal responsibilities. These crucial money skills should be taught in high school in order to give young individuals the information they need to handle their finances with confidence. High school financial education gives students a solid foundation for a prosperous and secure life by assisting them in achieving their objectives and preventing costly mistakes.
