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Learning Financial Literacy While Young has Long-term Benefits

Building a solid financial foundation with teenagers is critical to helping them become adults who know how to balance their checkbooks and save for retirement. Yet, research by the nonprofit, nonpartisan think tank the Milken Institute reveals that three-quarters of teens in the U.S. do not possess basic financial literacy skills.

Healthy financial habits—borrowing, budgeting, using credit—must be taught to prepare young adults for financial independence. Doing so requires giving teens access to 21st-century skills like researching and problem-solving.

Some public schools in the North Hills area are going the extra mile to ensure their students have the financial literacy skills needed to become successful young adults.

At Seneca Valley High School, students can enroll in elective personal finance courses. Personal Finance 1 covers topics like financial planning, budgeting, filing the Free Application for Federal Student Aid (FAFSA), understanding credit, and filing annual taxes, according to personal finance teacher Maria Brooks.

“Personal Finance 2 dives deeper into buying a home, insurance, investing, consumer credit, and consumer debt,” said Brooks. “Students taking our Blended Personal Finance 2 course have an opportunity to participate in the 10-week Budget Challenge game in the spring, focusing on managing an online checking/savings account.”

Students taking either course can participate in the stock market game, sponsored by the Council for Economic Education at Butler County Community College. “The stock market game follows the market for 10 weeks, allowing students to learn about and practice making investment decisions while trading on the market,” said Brooks.

While optional, Brooks said the courses are popular among students because of the benefits associated with them, which include learning money management strategies and how to assess risk tolerance. Students can also realize the wisdom of long-term investing and how compound interest can benefit them.

“We discuss topics that are relevant to current decisions students are making for their futures, which makes the course popular,” she said. “Students hear differing opinions and ideas from their peers while forming opinions of what will work best for them in the future.”

Seneca Valley isn’t the only K-12 school offering financial literacy to students. Pine-Richland High School offers similar elective classes through its business department.

Courtney Kronk-Love, a business education teacher at Pine-Richland High School, said students in grades 10-12 can choose from Personal Finance and Honors Finance & Investments. Students must complete the personal finance course before they can enroll in the honors course.

The first part of the personal finance course covers topics like financial goal setting, career exploration, budgeting, and banking, said Kronk-Love. “The credit unit includes understanding credit and learning about credit reports, credit scores, and student loans,” she said. “We continue the semester with an overview of saving, investing, and risk management through insurance.”

Getting paid, understanding which taxes and deductions come out of a paycheck, and filing a federal tax return is the final part of the course. “It’s all things that will help young people manage their money, especially as they are first starting out on their own,” said Kronk-Love. “Some common themes that we talk about are opportunity costs, not spending more than you earn, paying your bills on time, and paying yourself first—saving/investing 10-20 percent of your income prior to budgeting/spending.”

Students who continue in the Honors Finance & Investments course learn about why investing is important, stocks, bonds, mutual funds, index funds, risk management, retirement plans, investment strategies, and they can also play a virtual stock market game.

“Students take this course because they know that no matter where their career paths will take them, they will still need to learn how to manage their money,” said Kronk-Love. “I often hear from students that this was one of their favorite classes in high school. Occasionally, I even get an email from an alumnus who used the skills they learned in my courses to start investing, signing up for their company employer-sponsored retirement plan, buying a new car, or saving for a down payment on a house.”

Hannah Young, a senior at Pine-Richland High School, said she’s benefited from both Personal Finance and Honors Finance and Investment. She said saving early was the lesson that stuck with her.

“As a high schooler, you don’t think about saving money for your future,” she said. “Compounding interest allows you to earn money off the interest on your savings. The sooner you start to save for retirement, the more time your money has to grow and take advantage of compound interest.”

Her classmate, junior Giovanni Aiello, had a similar takeaway from the personal finance courses. “One of the most important lessons I gained from Personal Finance is the different ways I can grow my money indirectly with interest over time,” he said.

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