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Lesly Pineda

Tonja Vincent

English 2010

December 2, 2017

Financial Literacy and Its Importance

Financial literacy is a very important subject that should be studied while attending high school

or even earlier. Every High school student should know the basics, such as budget planning, how

a disc works, how to invest money, its a life skill that should start developing in High school, or

even earlier on so when they so call leave the nest they will be ok and know how to manage

finances. It all starts when we get our first allowance we learn that we can spend our allowance

on anything we desire from candy to a small toy, we also learn that if we dont have enough

money we cannot buy that object that we so much desire. Its never too early to start saving-

adcouncil The same goes for learning. We may take a class, or we may not it all depend on the

school district. Financial literacy should be

a course that should be required to take, like

the common core subjects: Math, English,

Science, History. I myself think that its just

as important and it never too early to start.

Figure 1 adcouncil.org Financial literacy


In the state of Utah there is a program that

works with school all round Utah. This program helps the student have a taste of what adult life

is all about, for example what its like to run a business and what its like to pay some bills. to

provide mentors to our young people to empower our students to help them learn the principle of
free market capitalism and the skills they are going to need to compete to ensure that Utahs

future workforce has the skills. - Governor Gary Herbert (JA-Utah)

Financial literacy defined by the president advisory council, the ability to use knowledge and skills

to manage financial resources effectively for a 52lifetime of financial well-being. pbs (2008 Annual

report to the president)

Again, why it so important for the younger generation to learn, why is it needed. Well Financial

literacy helps individuals become self-sufficient and understanding the basic of financial areas;

from managing personal finance to business finance, managing your money to saving money,

making the right decisions, investing, insurance, budgeting, retirement, taxes. financial literacy

is low among the young; fewer than one-third of young adults possess basic knowledge of

interest rates, inflation, and risk diversification. -NBER. Right out of High School, some

graduates dont have a single clue on how to manage their own money or even have the basic

skills. They get a job but dont put the hard-earned money into savings account or they just pend

it right of the bat then they wonder there it all went. Some still want to attend college and

university, they take out student loans and end up in debt. Even after they graduate from college

or university they are still pay their student loans when they are in their late twentys.

The young adults today have an example of what the past generating did that got them in

financial trouble and what they went through. In 1980 consumers spending soared and interest

rates dropped, they found themselves in debt and even some declaring bankruptcy. Around 1990

and 2000s lots of people were buying house and ended up losing them because they could not

afford to make the payments. They ended up losing the house and in debt.
An example that relates to me and how financial literacy helped me right after high school. The

fall right after graduate I was to attend college and I need to not spend my money on

unnecessarily things, such a new school clothes that most kids look forward to the new school

year. I knew that I was going to need to buy: textbooks, Homework access code and depending

on the class maybe some other things like a calculator or other materials. I made a list of all the

material in need asap and the other stuff that I could buy as the class went on. Because I took

financial literacy in high school I knew how to save my money, which is a big problem for me

because I love to go shopping, I prioritized what I first need to get. Its true that just taking the

class in high school does not teach your everything, that were my parent came in to help.

Its a lot harder to say I cant spend

anymore when you are using a credit/debit

card, and this is because you arent

exchanging physical money it not in your

hand, it in your bank account and dont

realizes your out of money until your card

id declined or you check your account

online or in person, but by that time its too

late. Figure 2, they are in so much debt that


Figure 2 imager from: Cowin Financial Literacy Program "2015 Financial literacy
they move back to their parents house. summer institure (july 6-10)

Americans own over $1.45 trillion in student loan debtthe average class of 2016 graduate has

$37,172 in student loan debt- Student loan hero


However, it also makes sense that students are taking the class but since the class room is

overcrowded it causes the students to not learn the matter. Overcrowded classroom means that

there a fewer teachers/teachers that dont finish as a student teacher because there are so few

teachers that they are needed, and it does matter if they finish or not they need to be hired or

insufficient space/classrooms for all the students. The reason why there are a few teachers is

because being a school teacher is not the most popular profession, why because the pay is not

that great. With few teachers students are put in overcrowded classrooms, and to understand

financial literacy and whatever topic they are covering students need 15 or more hours of the

lecture/activates to be beneficial to the students. In the United states, out of all 50 states only

20% of the states meet this standard. Its clear to see why students arent benefiting from taking

the course. But it could improve because there are programs that are nonprofit that help students.
Works Cited

Cowin Financial Literacy Program: 2015 Financial Literacy Summer Institute (July 6-10)

https://cowinfinancialliteracy.tc.columbia.edu/2015/03/03/2015-financial-literacy-

summer-institute-july-6-10/

Financial Literacy among the Young: Evidence and Implications for Consumer Policy|

NBER.org http://www.nber.org/papers/w15352 Web. 4 Nov. 2017.

"General Financial Literacy Course - FITC - Finance in the Classroom." Web. 30 Oct. 2017

http://financeintheclassroom.org/teacher/course.php

Is Your State Making the Grade? Report: Making the grade | Center for Financial Literacy

https://www.champlain.edu/centers-of-excellence/center-for-financial-literacy/report-

making-the-gradeWeb. 4 Nov. 2017.

Junior Achievement of Utah." Web.30 Oct. 2017.

http://ja-utah.org/

Your Life, Your Money | what is financial literacy?


https://www.pbs.org/your-life-your-money/more/what_is_financial_literacy.php

"Report: Utah only A+ state in financial literacy for students | Deseret ...." 20 Oct. 2015,
https://www.deseretnews.com/article/865639513/Report-Utah-only-A-state-in-financial-
literacy-for-students.html. Web. 30 Oct. 2017.

Student Loan Hero | A Look at the Shocking Student Loan Debt Statistics for 2017
https://studentloanhero.com/student-loan-debt-statistics/

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