Why are the subjects of money, budgeting and online business not taught in our colleges, not even to international students?
If we are truthful to ourselves, we will admit that school is the ideal place to learn these invaluable skills.
In fact, how to implement effective money management programs such as college scholarships, grants, and work-study programs should be encouraged in the curriculum.
Higher secondary advanced mathematics courses are not sufficient enough to understand the basics of personal finance.
In a digital globe, where having a credit card and a student loan debt are very common, it’s only important that students are prepared for such money management necessities.
Financial Literacy and Money Management in Schools
Classes under financial literacy will give you in-depth knowledge about budgeting, savings, debt, investing, and crowdfunding. These are basic education that could get a student to build strong money habits beforehand and to avoid life-long financial devastations.
Learning such principles of personal finance beforehand can help one in handling finances. Financial literacy and money management habits are vital requirements we need to teach our young souls now more than ever before.
Some of the best reasons why we need to start teaching money-making and budgeting skills to college students are:
1. Little Knowledge of Finance, Handling Temptations
Youngsters have gained little or no education on finance or economics according to the data reported by the National Longitudinal Survey of Youth and the Jumpstart Coalition for Personal Financial Literacy. Their spending and borrowing tendencies are obvious in their interest rates or credit card status.
Having access to the internet has brought so many temptations, instant purchasing through online shopping. Yet, the importance of saving and delayed gratification ought to be taught early before they lose “track of life”.
2. Owning More to Debts, Expensive Student Loans, and Avoiding Being Bankrupt
College students around 18-25 own at least one credit card. So, basically when graduation is done, half of the students end up bearing 5times more debt, on an average of $3,000 or more.
So, learning how not to take credit purchases for everything in those study periods of four years can only be possible through a financial literacy program offered by the school. This will help them to be less in debt after graduation.
With the growing cost of high education, there is a fall in the pace of income and government aid with it and more students are turning to any lender willing to help not minding if there’s going to be an increase in debt. As a result, students end up seeking to subprime lenders.
USA Today in 2001 reported that one in five Americans around 18-24 declared bankruptcy.
Bankruptcy issues are the outcome of student loan debt, being in bankruptcy by 15 age is also a possibility.
Savings are savings for life. This means that instead of letting them make the same mistakes most students with debts made, they should start learning how to save early.
College students must be made to realize the value of hard work, saving and investing early in high school as this will help them avoid hardships in their coming days.
3. Opportunities Are Not Equal and Government Financial Aid Aren’t Supportive Always
Financial aid is something that every student needs to easily pay for their college tuition. Looking at the rising population with competitive programs and limited plans, it is obvious that the young generation wouldn’t benefit from the same governmental aid as their parents did, especially with their retirement.
Starting to save and invest early in life is the only way for today’s generation of young people if their dream is to have a sound future.
A data report by The Jumpstart Coalition displayed that most of the educated young individuals belong to a well-educated background. This data also recommends that financial literacy is focused among the middle and upper classes only, while every person is faced with the same financial decisions.
It is very important that all the kids are warned about opportunities, that they belong under the same roof when it comes to money management or budgeting.
4. High Principal Borrowing for Long Term
There is a time in the life of everyone that you will need to borrow money. Some people’s borrowing time starts as early as 15 because they are responsible for covering their tuition fees in school.
There is a huge advantage in knowing the cost of interests, payment penalties, and schedules, the idea of balloon payments in making wise payments and not taking out something beyond your limits. You can always estimate by using loan calculators.
SaveAndInvest.org aims to support youngsters understand the cost and borrowing of debt consequences.
5. Investment Choices
Knowing that there are ways you can increase your money value is one thing and knowing exactly how to increase your money value and expand your business is another thing.
Oftentimes, kids lack the requisite knowledge needed to make their choice from different possible investment options. They either use saving bonds or passbook saving accounts and those are not the only investment choices enough to extend their money value further.
TheMint.org helps students learn more, build their financial security sooner with money management skills for their very future.
6. For Retirement, Renting Apartment or Utility Payments
“Innocent minds have no barriers to cripple”.
The young generations are unaware of the pensions, the IRAs or the 401(k) plans. Saving for retirement as soon as you get employed should be taught to college students so as to save them 45 years in the future.
Students often begin their college careers living in dorms, and often dorm life does not last. Learning to search for housing or managing bills and utilities will take you far. Besides, learning how to rent, keeping roommates, shapes you for future success in case of ongoing costs of homeownership.
7. Skills of Life with Personal Finance Project
Home chores and other related errands might not be related to finances, but these basic financial skills will get you further in life. Doing laundry, mending clothes and shoes, and handling simple car maintenance activities by yourself will help you save more money.
Having a personal finance project is very much relevant. The visual capitalist is launching this project via infographics, visualizing data, and motion graphic videos to implement such topics.
8. Support a Checkbook, Getting Market Methods, Paying for College
Marketing is always competitive and crucial regarding stocks among different countries.
Not only you’ll be able to keep deposits and withdrawals track of your monthly statement, but it’ll also ensure the checkbook register matches your bank balance per month.
The wrong idea is that “college costs can be covered only by student loans”.
Besides owning the repayment method, applying for college scholarships, grants, and work-study programs are the best ways without having massive loan debts, and passing this applicable tip to young ones to graduate debt-free.
9. More Americans Demand Finance Taught in Schools
Parents or elders nearly 60% actually feel the need of guiding their young ones with more financial techniques, reported by Qualtrics survey.
It displays that 30% want it from elementary schools, 33% in middle school, 32% in high school and lastly 5% from college only.
Plus, vast majority of Americans are ready to quit to get financial lessons consisting of happy hours 35%. Dating apps 29%, morning coffee 24%, vacation days 12% and sex live 8%.
10. Valuing Money-with-Time and Dealing Risks
Having a well-established finance status today is considered more valuable now than in the past. So, advanced investing could have expanded your money, and clearing off debts and future savings wouldn’t be a problem.
“Time waits for no one”. Knowing how much of a risk-taker one can be with the consequences of success is enough to fuel up their entrepreneurial world.
11. Taste of Diversification – Understanding Income vs Wealth
In line with the fluctuating marketing portfolios or other assets, there is always a diversification in the real estate plunge. Teaching them to save and expand their money in areas like, jewelry, cash money, bonds, and more are so important.
Earning and not saving is a huge difference. For instance: a doctor earning $300k annually may be considered as rich but if he spends with no savings, he is not “wealthy”. Similarly, a person earning 60$ but still learns how to utilize and expand little money may end up wealthy in the long run.
12. Side Hustles, Having Arbitrage Ideas, Exercising Debt Options
Youngblood is always talented and creative. Using skills to doing side business can earn a good amount of income to lift their financial back, apart from doing full-time, or getting paid as a freelancer.
While the best youngsters have to focus on taking profit of time arbitrage to boost their income, working on long-term goals rather than short-term goals is the best approach.
The Federal Reserve data estimated that 2 million credit cards were traceable to student accounts in 2009. Since banks and colleges reached an agreement for student debt options, payments for tuition and other related expenses are now made through credit cards every year.
By the time you return back to see where your financial structures punctured, it might be too late. The best method to improve the economic situation of today’s generation is by giving them lessons about financial skills. A savings plan is very useful. To be wise in spending and smart in investing are things every college student should be engrossed in.
About the Author
I am Nchum Felicita, a financial expert writer at The College Monk who appreciates writing. Budgeting and finance methods is a must that I wasn’t aware of during my time. My aim is to create easy guidelines towards exercising financial extensions, helping young dreams acquire solutions in the coming days without economic constraints.