Money. We all know what it is and strive to gain as much of it as we can. We try to get those big-time jobs so we can get boatloads of moolah and spend it on all the luxuries we can get our hands on. But, what good will it be if I don’t know how to budget correctly, pay my rent, and have the proper credit card? I am a 19-year-old college student and still do not have a credit card because how am I supposed to know which one to pick? How much is too much to put on it? How much of my paycheck should go to rent? How much should I be putting in my savings? How in the hell do I even do my taxes (the question everyone asks)? I am living on my own, over a thousand miles away from my parents, and yet, my financial literacy skills are nowhere to be found. Have you heard the phrase “I’m a broke college student”? Well, maybe there’s a reason for that.
Most teenagers still feel as though they don’t know what they are doing financially. About three out of four teens don’t feel confident in their personal finances. 73% want to learn more but 15% of them don’t even know where to start (I feel you). Is that alarming to anyone else? That the majority of those who are at the age to enter the workforce and are beginning to earn money don’t feel confident in what to do with it? There was a survey conducted by The National Financial Educators Council (NFEC) asking adults how much money they thought they lost that year because of the financial knowledge they lacked. The average estimated loss of money was $1,819. If that was added up for every adult in the U.S. (254 million), it would be $436 billion. Only for 2022! That is a huge amount of money for American adults to be losing. There are higher implications than just “Oh, yeah, I lost some money.” Huge impacts can be made to the economy with people being financially illiterate. Some include higher debt and bankruptcy rates along with a wider wealth gap (especially since this disproportionately affects lower-income and marginalized populations). This not only affects the individual but also the economy as a whole because if people have less money, they won’t spend money and add to the economy.
As a teenager, I am not financially savvy. I don’t own a credit card, know what APR is, or know how to pick the best credit card for me. I save money, but I don’t know if I’m saving enough. I want to get an apartment when I graduate, but I am not confident in my knowledge to get one. In school, we would talk about finances maybe once a month. There was no consistency in it to retain or learn real-life knowledge from it. In high school, they offered a personal finance class, but it was an elective. There were so many issues with this class for me. Firstly, it’s not a requirement, so why would I choose that when I can take a class I enjoy? Secondly, there was only one class of about 20 or so students in a school with about 1,200 students. So, it generally wouldn’t be feasible to get into. Lastly, no one learned anything from that class, which, especially for a class that isn’t taught in the curriculum, is disappointing. If I am taking a class to learn about how to handle my money and gain financial literacy, I would like to actually learn from it. Especially since that is probably the only class from high school that would be of any use in life. Even during senior year, when it is part of the curriculum to take an economics class, it is usually more about micro and macroeconomics for society. There wasn’t a set curriculum for finance. If a teacher taught it, it was typically of their own volition.
I wish that I had been taught more while in school before I was sent into the world without understanding proper tools for financial success, but instead I was handed a diploma and told “good luck.” A third-grade teacher in Charlotte, North Carolina is changing that for the new generation. Shelby Lattimore is teaching simple financial literacy in her class. Some of the topics she covers are rent, budgeting, working, inflation, late fees, and much more. She actually makes her students pay rent! No, she is not taking real money from them. She uses play dollars that they can acquire from doing classroom jobs such as being a line leader, door holder, teacher helper, board eraser, or table washer. Having the play dollars teaches them the responsibility of having money without the risk of them handling real money in case something does happen to it. Every other week, they receive their paycheck for the classroom jobs they did. The kids have two options: spend it or save it. This teaches them budgeting because they can spend it on things such as candy ($2), homework passes ($3), lunch with the teacher ($7), or the big-ticket item of being the teacher for the day ($30). So, the more they do classroom jobs, the more they can buy. However, they do need to make sure they have enough money to make rent on the first of the month. They each have a number that she calls. Once their number is called, they must pay $5 for rent. But if the bill collector calls their number and they aren’t paying attention, they have to pay an extra $1 as a late fee. There are numerous things that students can be fined for, such as late homework, breaking things, being tardy, or showing disrespect. As another lesson, one month, she taught inflation by raising rent, not one but $2. This teaches them real-life changes in prices. In the 1960s, rent averaged $71, which is $588 today. In 2018, rent averaged $1,600. That’s a big difference, but that’s the idea she is trying to get across. There are many reasons for inflation, but for third-grade purposes, she gives them the idea.
Many of Lattimore’s students come from homes that live paycheck to paycheck. Teaching financial literacy in school can break the perpetual cycle of poverty. Lattimore said she “hopes her classroom economy can help bridge the financial learning gap for her students,” especially being in Charlotte, North Carolina. This is an area where a large amount of generational poverty is present, according to Lattimore. Furthermore, this classroom economy not only promotes financial literacy but also encourages good behavior in class and motivates students to have better attendance.
All in all, there are so many benefits to teaching financial literacy, especially at a young age. If I had this in my school, I would at least feel more confident in my financial standings. I am definitely not spending money willy-nilly, and I don’t have absolutely no idea what I am doing, but there are things that I probably should know when living on my own that I certainly do not. If I had this integrated into my education as a small child, I may have been more prepared for life’s finances. But where do I even start? Credit? Doing taxes? Or something I don’t even know about?