Calculus Before Checkbooks?

Many high school students are at the doorsteps of momentous financial decisions—but are educationally unprepared to make them.

Reading Time: 3 minutes

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By Nelli Rojas-Cessa

We focus so much of our lives on scores. The SHSAT, SAT, ACT, and GPA are all quantifiable measures of our work and aptitude that we strive to perfect. But how many of us are preparing for the most important, ongoing score of our lives: our credit score? After graduating, some of us may never solve a calculus problem again. Others may never look under a microscope again. But every single one of us will have to manage our finances. And yet these are the skills that high schools aren’t teaching us.

Financial unpreparedness is a nation-wide catastrophe that is constantly chipping away at people’s livelihoods. A study by the National Financial Educators Council found that the lack of education on personal finances costs Americans a collective $295 billion in 2018. Only 34 percent of Americans can score at least a four out of five on a basic financial literacy test. Such high rates of financial illiteracy have detrimental impacts on people’s savings and economic stability. Nearly half of Americans don’t have enough savings to get them through three months of expenses, and 36 percent are financially fragile (meaning they cannot gather $2,000 within a month if faced with an emergency). Of course, external factors such as low wages and high living expenses greatly influence savings and debt, but if schools instill good financial habits in their students, future generations will be a lot more prepared for economic hardships, such as global pandemics or housing crises.

Schools have the responsibility of providing the resources and knowledge that will prepare students for their lives after graduation. Nowadays, however, more emphasis is put on grades than on preparation for real-world responsibilities like financial management. High school is a launching pad for students going off on their own, whether it be to college or to work, and it is a critical point for them to learn the basics of personal finance. Fundamental knowledge, including opening bank and investment accounts, knowing the logistics of credit and debit cards, and taking out loans (including student loans), are all left out of most high school curricula. The impact of this ignorance can result in crushing amounts of student debt, jeopardized credit scores, insufficient savings, and poor budgeting skills.

Student loans are such a critical concept that they are one of the frontline issues in many political campaigns. For instance, President-elect Joe Biden is planning to forgive $10,000 worth of student debt, a financial burden that about 45 million Americans carry. As people graduate from college, an overwhelming amount of debt weighs them down, sometimes up until their fifties. Yet when I go off to college and am looking to take out a loan without my parents’ support, research, and knowledge, I will be clueless about where to even begin. Like me, many high school students are at the doorsteps of momentous financial decisions—but are educationally unprepared to make them.

When schools fail to deliver education on essential life skills, families are forced to pick up the burden at home. Despite this responsibility, a study in 2017 found that 69 percent of parents have some level of reluctance to discuss money-related matters with their children, meaning many students do not get any financial education at all. Unfortunately, the students who are most negatively impacted by insufficient financial education are usually those whose families may also lack that knowledge. People are generally more willing and confident about discussing fields in which they themselves have been successful. Therefore, the more affluent parents with abundant financial knowledge are much better equipped to discuss financial matters with their children than parents who struggle financially themselves. This educational disparity regarding money, a matter that plays a critical role in everyone’s life, further increases the divide between the rich and the poor. Even worse, students may not even know that they are lacking financial literacy until they are thrown headfirst into making their own financial decisions and find themselves completely unprepared.

Recognizing the lack of financial education and the need for it is the first step toward creating a more financially literate America. Until our education system catches up and adds sufficient financial literacy education to the curriculum, students have to take on the responsibility of educating themselves. Whether it is through the extensive materials available online or through family and friends, it is crucial that every student acquires the financial knowledge they will need to be successful in the long run. Over time, your GPA will fade into an inconsequential measure of your past excellence; it’s actually your credit score that has the potential to define your future.