Financial literacy is vital now more than ever

Remember when Grandma would say you have to save for a rainy day? Well, 2020 wasn’t just a “rainy day,” it was a rainy year. The COVID-19 pandemic created both a public health crisis and an economic crisis, forcing most to drastically scale back their lifestyles. Unemployment levels hit historic highs, and more than a year later millions of people are still in danger of losing their homes.

The term “emergency fund” will never be the same.

It was true before COVID-19, and it’s truer today: We should be teaching financial literacy in every school in the country. We’re a long way from that, with just 21 states currently requiring a financial course in order to graduate. We’re shortchanging the next generation, who will most assuredly face emergencies throughout their lives.

I am a teacher at Northern High School, in Dillsburg, Pa. Here, it’s a graduation requirement for students to take Foundations in Personal Finance, a curriculum specifically designed to teach students how to budget, save and invest — lessons that stay with them for a lifetime. We’re showing them a clear path — a plan to manage their money so they can one day retire with dignity and not have to live paycheck to paycheck.

Students in my class are taught to budget with the parttime income they have now. This is good practice for when they start making their career income. They will understand the importance to give away some of their money to help others, literacy how to plan for day-to-day expenses, and how to save for the future.

Today’s young people are marketed to more than any generation in history. All of us are bombarded by persuasive ads to live the good life now and pay for it later. YOLO! You only live once! Credit card and loan companies, like snakes in the grass, are ready to attack.

Student loan debt, which now stands at $1.56 trillion, is out of control because we’ve lied to kids telling them, “You can’t go to college without debt” and “It will be worth it.” Then, we handed them a credit card and told them it’s for emergencies only, leaving them to figure it out on their own.

You may be asking, “Isn’t it up to parents to teach their kids about money?” Of course, but it’s probable no one ever taught them. There is a great deal of money anxiety out there. A Ramsey Solutions study finds that nearly half (46%) of Americans say their debt level creates stress and makes them anxious. The Federal Reserve finds that 40% of Americans couldn’t cover a $400 emergency without borrowing money.

“Save up and pay cash!” That’s the motto I use in class and at home. If you can’t pay for it in cash, you can’t afford it. Yes, it’s hard to delay gratification. Yes, it’s difficult to teach our children to wait until they have the money to buy something. But guess what? It’s worth it.

I’m happy to see more states requiring financial literacy, but 29 states do not. That’s millions of students who are left to figure it out on their own. How many families will be impacted? How much brokenness could be avoided? It honestly breaks my heart. We must do better.

Our kids are counting on us.