Higher teach salaries and improved math and science offerings are among the most prominent themes when discussing K-12 public education in this country. Undoubtedly, those are important points and they’re worthy of our collective attention, whether we’re parents or not.
Not far off on that list is the importance of financial education, though it doesn’t always command attention on par with math and science. It ought to because there are cost benefits to teaching kids solid financial fundamentals, meaning there are negative costs associated with glossing over the issue. A significant percentage of younger folks that confess to lacking adequate personal financial acumen also confess to making financial mistakes that have cost them $1,000 or more.
That doesn’t mean advisors have to get teaching certificates, but the demand is clearly there, particularly among younger clients, for more financial knowledge and it’s not just about how to make money in crypto or stocks. In fact, many Americans would be grateful for education, improved skills and tips that help them avoid financial missteps.
A recent survey commissioned by IRALOGIX confirms as much. Let’s explore some of the important findings below.
Improved Financial Education Takes a Village
It’s often said old habits die hard. With that in mind, when it comes to money, it’s advantageous to impart good habits on people when they’re young.
“60% of Americans say they would have better money habits today if schools had taught them the basics. Despite the real-world importance of budgeting, credit, saving, and investing, most adults say they entered adulthood financially unprepared – and they’re still paying the price,” according to the IRALOGIX survey.
Good news: Things are moving in the right direction on the personal finance education front. With the recent addition of Delaware, 30 states now mandate that students take a standalone personal finance class to graduate from public high schools, according to Next Gen Personal Finance. That number has nearly tripled over the past five years and at 30, the implication is that politics aren’t getting in the way because blue, purple and red states are among the 30.
Point is the right personal finance class in school and improved in home conversations and lessons to this effect can set kids up for long-term success or, at the very least, help them avoid financial regrets.
“62% of respondents say financial literacy is closely tied to family wealth, with lifelong money lessons often learned at the kitchen table, not in the classroom. In fact, 69% say they first learned about money from a parent or guardian. But 1 in 3 never had those conversations at all, creating a significant early divide based purely on the household you grew up in,” adds IRALOGIX.
Consider the Benefits, Costs
When it comes to early financial education, the benefits and costs are inextricably linked. Said another way, by avoiding the costs of financial mistakes, the person doing that avoiding almost automatically benefits. Retirement planning/saving is a prime example.
“46% of Americans expect to work past age 65, and not because they want to. Many point directly to the lack of financial education early in life as the reason they couldn’t save enough or plan ahead,” concludes IRALOGIX. “Without the tools to build long-term financial security, people are forced to extend their working years just to stay afloat. For nearly half the country, missing those early money lessons isn’t just a short-term setback, it’s completely reshaping what retirement looks like.”
Read the tea leaves there. If you’re a parent, the better job you do now of in home financial education while pushing your local school board to offer these classes to high schoolers, the less likely your kids are to be dependent on you later in life, meaning your own retirement situation will be that much more fortified. Beneficial indeed.
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