Young adults are entering the working world without adequate financial knowledge
Doesn’t it make sense to learn the basics of investing before you start putting away your own money for real? Maybe a course called ‘Investing 101’ or ‘Personal Investing’ would be helpful. Unfortunately, the importance of financial literacy is still not being taught in our schools and many young people are entering adulthood without a firm grasp of the basic knowledge of how to save and invest their hard-earned money.
The good news is that there’s a slow but steady movement of individuals who are trying to address this issue by advising educators on the importance of teaching personal finance knowledge.
However, the move towards teaching such an important life skill is still seen as something not required to be taught to the younger generation by many schools. It’s obvious that we’ve a long way to go before money management is routinely taught to young adults throughout the nation.
Below is a transcript of a retired financial planner as he recalls a typical conversation with the head of a popular university.
“In the Administrators office of one of the largest universities in America, I recently asked if they offered personal investing courses or any finance course where the student could learn how to invest. After all, we all need to start investing money someday, and it is much to one’s advantage to be informed about such a fundamentally important topic”
“I was therefore somewhat surprised when, after some consultation with his secretary, his response was “no, or at least I can’t find one”.
“I was informed that they had well over 50,000 current students enrolled and offered hundreds of courses in the various colleges throughout the university. But he could not find a single course under the topic of personal finance management.”
“I suggested that teenagers and those in their 20’s are generally unskilled in managing their finances once they leave education. They tend to procrastinate when the money is flowing in. They’re too busy earning it and don’t have the inclination to learn to invest.”
“The Dean nodded in agreement and we left the meeting with a firm plan on how to proceed with a full curriculum on money management and investment basics for the students. I did not return to that university for several years. However, out of interest, I returned one afternoon for a follow-up consultation on how the courses were going. I was somewhat saddened to be told that not one single financial literacy course had been deemed as a necessary topic of education by the administration board. Not a single one”.
Financial education MUST be improved
It’s quite depressing that our education system is letting our children down when it comes to passing on financial knowledge. Of course, many schools offer economics classes, but these are a world away from the realities of surviving on a wage and paying monthly bills. Some may say that learning to deal with money should come from the parents, but if they’ve never had training in the subject then how are they going to be able to pass on the skills to their children?
In the West, we have one of the most sophisticated teaching systems ever devised, and yet such fundamental life skills as money management and financial planning are a mystery to many young adults. This is one of the reasons young people are getting into a spiral of credit card debt that will take them years to recover from. We have a culture where it’s acceptable to spend, spend, spend and the values of save, save, save have been forgotten.
Education needs to be improved in this subject, but it will only happen once those in control of the education system see how important these skills are.
As always, please post your thoughts and opinions below.