Embark Early on the Journey to Financial Literacy by Somashree

Embark Early on the Journey to Financial Literacy by Somashree - June 2018 Scholarship Essay

The first day of ninth grade, I stepped into the personal finance classroom, stomach full of butterflies in anticipation for how the year would go. Being an early bird to the scene, despite expecting a large turnout of my classmates and friends, the weight in the pit of my stomach plunged as only a handful of unfamiliar faces shuffled in with the same disappointed dispositions as myself. I began to regret my choice for an elective immediately. My high school career had just started! What I did in this one year would eventually determine my chances of achieving the penultimate Asian dream, getting into a great university! My body slumped and my heart sank in despair as I realized that not a single friend from my grade would be my second in command on this voyage. I was all alone in a class I didn’t think was all that essential.
Four years later, on the contrary, that lone journey into a world I didn’t quite understand, that blind but trusting jump into something that only “grownups” had to deal with made all the difference in the world. Personal Finance should be not only a required class but a conditioned habit necessary for survival. I didn’t wholeheartedly believe it, though, until I came across some of the most staggering statistics. Around the country, out of 45 states only 8.6% have any personal finance requirement for graduation as a senior, a number that dives even further in low income school districts where such a class is ever more imperative. Perhaps in the “old days” simply saving a proportion of your wages and putting it into a bank account could have been sufficient for a decent retirement fund, but now not even a lifetime’s worth of saving is enough to live off of. Coming from a background of immigrant parents with little to no financial knowledge stepping into a foreign country, being able to take this class early on helped me understand what most adults struggle to grasp sometimes throughout a lifetime: money management. In today’s society, being financially literate is often the same as being literate at all; without both it is impossible to live a productive life without constant anxiety and mind-blowing stress.
Looking at it from a social prospective, there have been hundreds of newspaper articles and blogposts written about the need for such a class given the serious gap in financial knowledge exhibited by millennials and kids from generation Z. Even some politicians have taken it up in their state legislatures to mandate initiatives for financial literacy across the public school education system. Yet more times than not, financial education ends up in the same category as the dreaded “birds and the bees” talk in Asian families; kids should somehow know about it by the time they grow up so no need to invest so much time on it. Taking a moment to look at it through an economic lens, though, is all it takes to be convinced of its importance.
Today there are so many factors that come into play both on the micro- and macro- economic level that determine our success. A recent post by CNBC indicates that on an individual level, low financial literacy rates correspond directly with low credit scores and immensely high levels of student loan debt. By depriving students of each generation a quality financial education, we are essentially barring them from enjoying some of the finer things in life (i.e. a nice home for a family in the future and dream job from a dream college). Despite it not being everybody’s goal in life to pursue the American Dream, by restricting them from understanding early on what it means to be responsible and sustainable with money, students unknowingly collect the short end of the stick. At the same time, a lagging financial education movement plays out in the whole country’s economy as well. With an incrementally larger amount of dollars being wasted on various forms of debt and interest every year, less money is being spent on the main drivers of our GDP: consumer and investment expenditures. Putting government money behind financial education is itself a type of investment for the future and as more dollars are saved and used productively by a financially literate person, the higher the per capita standard of living regardless of one’s current socioeconomic standing. In essence, you feel richer by living in a richer country with individuals making the right financial choices.
The problem with leaving personal finance as an elective is that we are essentially embroiling students in a quagmire of their own indecisiveness. Looking back at high school, how many adults would’ve known that opting out of that one personal finance elective to get some extra sleep in during the morning could be one of the worst decisions of their life? Therefore, everybody should be given access to it at least once in high school, even if it is to debunk some rather ludicrous myths about managing money. So let’s break the stigma, set our minds straight, and help the next generation venture into the journey together to becoming financially literate!