Finances can be stressful, especially in college when there are so many other responsibilities on students’ plates.
College is the time for students to broaden their education. Classes like math, English, science, art and history are all required to graduate. These classes are beneficial in many ways, yet one class that may benefit students the most is missing—financial literacy.
But what is financial literacy?
A financial literacy class teaches students how to open bank accounts, manage budgets, save and invest money, file taxes, pay off loans and so much more.
Students can benefit from a financial literacy class in many ways, and since it isn’t a required class, here are five reasons why students should take it.
Preparation for after college
When I was a senior at Crimson Cliffs High School, I took a concurrent enrollment financial literacy class. It was required for seniors, and it was the first year they required it to graduate.
This class prepared me for jobs after graduation as well as for college. The lessons I learned have stayed with me. I learned about house loans, mortgages, taxes and paychecks. This taught me how to budget and save money.
Teach students the best credit line for their needs
One of the things I learned was how to choose credit cards and use them correctly to build credit. Because of this, I have been building my credit without falling into debt. With so many different options for credit cards and loans, a class like this would be incredibly beneficial for students to have.
According to Sallie Mae, it is estimated the average college student graduates with more than $4,000 in credit card debt.
Mountain America Credit Union has many resources for anyone interested in improving their finance literacy. Included in those resources is a financial coach who can help lower interest rates, manage loans and provide advice on ways to make better financial decisions.
A majority of students feel unprepared to manage money.
In a recent study by Everfi, 30,000 students across 440 institutions were asked if they felt prepared to manage money. An alarming 53% said they were least prepared to manage their money compared to other challenges of going to college.
By making a financial literacy class a general education requirement, students could learn to better understand their money. If the students in this study were required to take a class like this, the number would likely diminish.
Another great resource for students is Young Money University. This is an online program that students can take to improve their financial literacy. It’s a five-step program that teaches students how to manage a budget, loans and paychecks.
Students could benefit from taking a course like this, especially if they have no time in their schedule to add another class.
Help people stop living paycheck to paycheck
According to a study done by PR Newswire, 61% of Americans, or 203 million people, were living paycheck to paycheck as of June 2022.
With more confidence in managing money, this number could go down drastically. Learning how to budget is one of the hardest things we, as students, have to learn, especially when students have to take into account bills, savings, groceries and tuition.
Teach students to make better financial decisions
Just like with budgeting, making good financial decisions can save you from years of debt. Understanding how to use a credit card and how to balance money is incredibly important; yet so many students struggle with financial decisions because they don’t know how to access these resources.
This leads to student debt in many ways. It’s not easy to pay tuition, and many students are taught to just take out a student loan without understanding the possible consequences of them.
A Forbes article about debt said, “Financial literacy classes can teach kids how to fill out the Free Application for Student Aid, utilize federal grants and apply for scholarships.”
There are so many resources out there for students. Utah Tech even offers a free online course for students called Cash Course, but not many students know about it. This resource is a great alternative to a financial literacy class.
Financial literacy can set students up for future success, and having access to these resources can be a tremendous step in the right direction. But to get the most out of financial literacy, students should take it a step further and add a financial literacy class to their schedule.
