According to a study performed by the National Endowment for Financial Education, only 24% of respondents showed basic financial literacy in the study, with just 8% showing a high level of knowledge. Yet, 69% gave themselves a high self-assessment of financial knowledge. Very few people across the world actually possess financial literacy skills, and being informed can help people improve their budgeting and improve their quality of life. 

As per the S&P Rating Services global financial literacy survey, around 57% of American adults are financially literate. Also, according to a report from the Global Financial Literacy Excellence Center, Gen Z participants were only able to answer an average of 37% of financial literacy questions correctly. Financial comprehension is severely lacking and a global issue.

One of the benefits of financial literacy and its widespread implementation in schools is that they can help provide a better understanding of the economy. Without it, many students fall through the cracks and lack important skills that set them up for financial success later in life. Financial literacy also helps people avoid devastating financial consequences, such as crippling debt or bankruptcy. Many daily expenses require knowledge of budgeting and credit scores and how they impact interest rates. It also helps people prepare for long-term financial stability through investment opportunities and saving plans for retirement or emergencies. 

Furthermore, financial literacy can have benefits beyond individual gains according to the Queensborough Trust Bank. Financially literate people can contribute more to economic stability and growth, weather financial downturns better, have more self-reliance and promote social equality.

In Mounds View courses like Personal Finance, which is now a requirement to graduate, teachers try to instill useful knowledge into their students to combat financial illiteracy. “There are lessons peppered throughout the [Personal Finance] course in practical knowledge and skills that can help students make changes to their own financial system on the fly while they’re taking the course,” said Personal Finance teacher Philip Schut. These classes reinforce lessons through the use of hands-on activities and in depth-discussions. “We’re laying out a framework or a blueprint of a financial plan that can help students start to put money away into savings, so that they can establish an emergency fund, so that they can start to branch out and find higher yield products beyond a basic savings account,” said Schut. 

These teaching strategies and their real world applications have led to better engagement and participation from the students. “I’ve had tons and tons and tons of students tell me over the years that it was one of the more impactful classes, if not the most impactful classes they’ve ever had,” said Schut. 

Some important skills that students gain in the class include wealth building, investment strategies, buying real estate, retirement options and career plans. “[We] research different career options, the money associated with getting the education needed for that career, and then how much money they’re expected to make afterwards,” said DaNae Klimek. Students also learn about behavioral economics, which allows them to gain a deeper understanding of their financial decision-making. 

Junior Thien Tran, who took personal finance in his freshman year, learned both financial literacy and career skills, like making a good first impression. “It helped me to better understand how to do my taxes, how to budget and how to better understand money,” he said. 

Financial literacy is a widespread issue, and many lack this crucial life skill. It helps build better relationships with money, understand how to grow savings and set good habits that will continue to be useful for students’ entire lives. As long as money, currency and jobs exist, the need for financial literacy will also exist.