Financial literacy may be more important than ever in a complicated world. Skills such as budgeting, investing and learning how to balance a checkbook are just a few aspects of personal finance about which far too many people know far too little.
South Carolina schools have a standard for teaching finance, with a legislative mandate that “financial literacy instruction shall be incorporated within current courses throughout the state.”
The problem is teaching the basics is not a priority, and thus a lot of students complete their high school educations without knowing enough about basic finance.
Kate Patrick reports on technology and finance news for InsideSources.com. She writes: “Financial literacy extends beyond mere understanding of how credit cards and budgets work. Most employees choose a health insurance plan through their employer, and most Americans mortgage their homes and take out loans to buy cars. The problem is, insurance plans, loans and mortgages can be confusing if you don’t have some background in finance.”
And according to a study by WalletHub measuring the financial literacy of each state, there is a major lack of that financial background. Most states’ grades ranged from D+ to B-.
In South Carolina, new standards to make personal finance a more prominent part of the education process are due in schools in 2020, but legislation under consideration in the Senate would go further. It would require high school students to pass a personal finance class to graduate. The half-credit course would conclude with an end-of-year test to pass.
Foes say the legislation would add another layer of testing that teachers do not need. But while too many testing mandates are a legitimate complaint by the state’s teachers, this one makes sense. Such a course should already be in place in our schools.
Beyond the schools, the financial services industry has a stake in better educating Americans. Tony Steuer, a financial expert and author of “GET READY!: A Step-by-Step Planner for Maintaining Your Financial First Aid Kit,” told InsideSources’ Patrick that insurance companies, lenders, hedge and mutual fund managers do not do enough.
“The financial services industry continues to put out really opaque materials and not simplifying their products and services in a way that people can easily understand. … Financial services companies could dramatically simplify what they do,” Steuer said.
And while some major firms are taking steps to better educate people about finance in order to expand their clientele, Steuer’s bottom-line message must be remembered: Financial services companies always have their own agenda -- to make money off of you.
A knowledge of personal finance won’t necessarily turn today’s students into the financial wizards of tomorrow, but it can help them greatly in day-to-day life with the vital task of managing money. Passage of the S.C. Senate bill would a step in ensuring students get a necessary education in finance.