Studies have shown that most adults are only able to correctly respond to 50% of the questions related to what is considered “basic” personal finance, including topics in banking, credit, debt management, and savings (NEA, 2024). It is not at all surprising that high school students are reporting knowing even less than adults in matters related to personal finance, even as they begin their first jobs and start to be responsible for their own finances. Introducing financial literacy into the high school curriculum is not just beneficial, but essential for preparing students for the realities of life after graduation.
One of the most impactful exercises I conduct with my students involves a “Cost of Living” activity. This exercise prompts students to imagine their lifestyle expectations when they reach their early career years, specifically between the ages of 21 and 26. The first step of this exercise requires them to consider their ideal living situation, whether it be renting an apartment alone, sharing a space with roommates, or living at home with their parents. As they go through the exercise, they estimate their monthly expenses for various categories, including housing, utilities, transportation- without using online resources to help in their estimates. This forces students to rely on their own current understandings of costs- which is frequently far from reality.
After students complete their estimates for their monthly expenses, they compare their figures to the actual costs that I have provided for various living situations in Chattanooga, TN. For example, many students were shocked to discover the average rent for a one-bedroom apartment in Chattanooga, much less the price of a various utility expenses- some of which they didn’t know even existed! This assignment serves as a wake-up call, emphasizing the need for financial education to help students understand essential concepts such as budgeting, saving, and the importance of living within their means.
Teaching financial literacy in high school equips students with the skills necessary to make informed financial choices in both their personal and professional lives at the time where they need the most direction. Even at the high school level, students have financial concerns, such as the cost of a vehicle or paying for college. Without the knowledge of real-world costs, banking, debt management, and savings accounts, students are more likely to experience financial difficulties such as high debt levels, a lack of savings, or living paycheck to paycheck.
Sources:
National Education Association. (2024, May 31). Financial literacy and economic inequality. National Education Association.
https://www.nea.org/resource-library/financial-literacy-economic-inequality