Financial literacy, a necessary skill that students should be taught before they graduate

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Caity E., Staff Writer

   Financial literacy. What is it and is it even important? When asking a student (who wishes to remain anonymous) if she had heard the term before, she responded with a puzzled “no.” I went on to explain that financial literacy is understanding how to handle one’s personal money. It covers basic skills such as reconciling bank accounts, paying bills on time, paying off debt and planning for the future.

   Leora Klapper and Peter van Oudheusden, from the World Bank Development Research Group, and Annamaria Lusardi, from The George Washington University School of Business, did a case study titled Financial Literacy Around the World: Insights From The Standard & Poor’s Ratings Services Global Financial Literacy Survey on worldwide finances. The study represented over 150,000 nationalities worldwide from people who identified as working class to middle class citizens.

   After looking at their findings and interviewing face-to-face another 140 randomly selected individuals, they found some shocking numbers: “33 percent of adults worldwide are financially literate. This means that around 3.5 billion adults globally, most of them in developing economies, lack an understanding of basic financial concepts. These global figures conceal deep disparities around the world.”

   This is a troubling statistic since many of our graduating students are soon to be those adults mentioned above. I explained to the student why I was bringing up this topic. When I first discovered financial literacy, I realized our school was one of many who did not teach their students the basic necessities to handle their finances. I describe an option of adding financial literacy classes to our advisory sessions and asked for her thoughts.

   “A lot of people at this school have their parents control their money. They get allowance from their parents. A lot of them just spend it right away. I think it would be good for them to learn, but also for when they graduate. They are going to want to handle their own money.”  

   This student brings up a very important point: the student body doesn’t understand personal finances because we aren’t given the opportunity to practice or experience them until we are 18 and we leave for university. If ASH began offering courses or classes to aid the student body in understanding finances, there would be a major improvement for preparation as life as an independent individual. When talking to another student (who wishes to remain anonymous she said a course like this would help better prepare her because she is currently very unfamiliar with the topic. Giving students the opportunity to change these issues by adding the proper support to our courses will only improve our lives in the future.