Few would argue that a well-rounded financial education is something desperately needed in American schools. Ideally, children would be instructed in sound financial decisions early on, before damaging mistakes are made that may take years to repair. Unfortunately, while educating our children in math and science, the need for imparting financial wisdom has long been overlooked. The consequence is future generations who lack the knowledge needed to secure their financial futures.
For the past several years, National Financial Literacy Month and the organizations that support it have sought to shift this national trend of financially under-educated citizens. Over these years, some strides seem to have been made. From 2000 to 2011, the number of U.S. households with debt dropped from 74% to 69%. However, there is still much to be done.
Richard Cordray, director of the Consumer Financial Protection Bureau, acknowledged this in his American Banker article and called for significant changes to be made:
“I believe it is extremely important to require young people to receive further instruction in personal finance education during high school, when they are becoming conscious of the reality that they are getting close to going out on their own to make their own way in the world. When young people do not have the skills to make effective financial decisions, they can incur unnecessary debt, miss opportunities to save money, and develop a poor credit history.”
The proposed program would include financial training and standardized tests in grade schools nationwide. This training would begin with the basics as early as kindergarten and progress to a more personalized financial education in high school. Even measures to ready teachers and parents are covered with recommended training and incentives to better prepare them.
As an institution that focuses solely on advanced financial education, GSBLSU recognizes the extreme importance that Mr. Cordray refers to and agrees that action must be taken. A well-rounded financial education must not only take place in adulthood. It should begin with children whose perceptions of finance have yet to be shaped. Before applying for that first credit card on their college campus, they will fully understand any impacts that may potentially be made to their credit.
We hope to see these changes implemented sooner rather than later. Perhaps with a financial education that has been ongoing since childhood, we may just experience an influx in highly-educated banking executives in the years to come at GSBLSU. We are always ready to welcome qualified new students.