The Importance of Financial Literacy by Kevin

The Importance of Financial Literacy by Kevin - November 2021 Scholarship Essay

In fifth grade, we took a class trip to Junior Achievement of Delaware. I was excited for two reasons, the first being, my older brother had attended in fifth grade and again in junior high school. The second being, my mom worked there. Again, I was in fifth grade, so don’t judge me.
We had to complete lessons and activities in preparation for our visit. We were given checkbooks to learn and practice how to successfully balance our money, complete a deposit slip and write a check. I’m sure by now, they have probably updated the process to include more electronic options, as not many people write checks or even physically visit a bank, but either way, learning how to balance and keep track of our finances is extremely important.
Junior Achievement of Delaware is housed in a large warehouse. The BiZtown is set up like a small town. It has a mayor, who students elect, and many businesses. Students are responsible for successfully running the town. There are businesses which consist of several employees who have goods they must buy and sell to other businesses in the town. Payroll must be completed by each business, checks printed and operating expenses paid. There is even a bank where students must cash and deposit a portion of their checks for savings.
I was the supervisor of a small business with 5 other employees. I made sure payroll was processed and checks were printed on time, and kept the business from going into a deficit. At the end of the day, our teachers and volunteer parents laughed when we all complained about how tired we were from a long day at “work”. The JA BiZtown experience taught me that I was not ready to be a full time worker, and that handling both my business and personal finances wasn’t easy.
A class that I think deserves more emphasis in school is financial literacy. We learn about math, English, social studies and science, but we are never taught how to balance a check book or effectively manage money. I admit, prior to the JA BiZtown visit, I had no concept of how businesses operated or how much work went into actually keeping track of how much you spent. I just thought you used a card and bought whatever you wanted. I had no clue as to what using a credit card actually meant and how lack of financial awareness can lead to debt and other devastating consequences. Again, don’t judge me, I was in the fifth grade.
While I do not proclaim to be a financial guru, I am more aware of how finances work and the importance of keeping track of how much I spend. When my parents took me to open an account, the representative asked if they wanted my bank card set up to approve transactions if I didn’t have enough money to cover the charges, stating the benefit of this feature would be to avoid embarrassment. The transaction would be approved, but I (my parents) would incur extra fees. They both said, “NO! If he doesn’t have the funds, then he doesn’t need to buy it.” Way to embarrass me in front of the teller, mom and dad. Was this part of the conversation uncomfortable? Yes, but I understand the implications of spending more money than I actually have in order to “avoid embarrassment”. My family does not have an unlimited stream of income. Budgeting and managing our finances is crucial to sustaining our household.
It is important for students to learn financial literacy. The later we learn how to effectively manage our personal finances, the longer it takes us to reset if the lack of knowledge causes us to make poor financial choices. Not having financial literacy can lead to unsustainable debt and other negative consequences. Without it we lack the tools and skills necessary for our future financial success.