In past decades, prices have skyrocketed and ‘Generation Z’ born 1997 to 2012 experiences pressure that previous generations did not have to worry about. Economic challenges that the new generation of adults have encountered range from high costs of education, housing and healthcare costs and job insecurity. Overall, causing financial stress, which causes individuals to resort to poor financial management methods such as emotional spending to ease their worries.

Schools preach about helping students prepare for the real world, but one major issue with the public education system are the gaps. Most specifically, financial literacy for youth. Financial literacy is crucial and should be a graduation requirement.

Once students are 18, they enter a world built on credit. Not only are they legal adults, they are responsible for their own actions. However, this allows financial institutes such as banks take advantage of these kids who have no knowledge of how credit, loans or financial plans work. For example, they could have a high interest rate of 20% and pay more than the original cost simply because they didn’t understand interest rates. This can lead them to be trapped in debt before they even start their lives, putting them in years of financial setbacks. So the difference between a 5% and a 20% interest rate could determine if they build wealth or not. 

Also, the earlier people are practicing responsible financial habits, the more powerful those become over time through their own experiences. Understanding ways to divide their money through budgeting can allow early investments into accounts like IRAs or 401(k)s at 18 instead of 30 years old. That 12-year difference could mean hundreds of thousands of dollars over a lifetime, but that opportunity is missed when graduates aren’t aware of compound interest which requires time to grow.

This issue goes beyond just personal finances. A financially literate population would not only help the individual but the entire economy. If people know how money works the economy functions more efficiently. Understanding how money works allows people to not immediately turn to loans or rely heavily on public assistance. Public assistance is a safety net for struggling families and vulnerable populations. But, when large portions of the populations lack basic financial skills they increase reliance on these resources, which in the long-run is completely preventable if schools had incorporated mandatory financial literacy into the curriculum.

Public education is designed to prepare students for adulthood. They teach history to understand democracy. They teach science for analytical thinking. They teach math to build logical reasoning. Though all are important skills, the first responsibility graduates face is financial independence. 

Although schools are giving students an option for CTE business classes which help teach financial literacy, they would have to continue going down the path of business which doesn’t allow kids time to explore other electives. Financial literacy should not be optional because adulthood isn’t optional.