Financial Literacy

Why are high schools still requiring algebra, geometry, calculus, and trigonometry; but, they are not requiring, and often not offering, the roots of financial literacy? The August 2021 quarterly report on Household Debt and Credit from the research and statistics, microeconomic studies department of the Federal Reserve Bank of New York reports, “ The total personal debt in the U.S. is at an all-time high of $14.96 trillion” (qtd. in https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2021Q2.pdf). And, “ The average American debt, per U.S. adult is [between] $58,604 [and $92,727 (https://oportun.com/financial-education/how-much-debt-does-the-average-american-have/)] and 77% of American household have at least some type of debt” (qtd. in https://www.ramseysolutions.com/debt/average-american-debt). The stats are shocking, disappointing, frightening, frustrating.

Credit card debt, which I refer to as ‘debt’ cards, student loan debt, auto debt, mortgage debt, personal loan debt: these are a crushing weight on the shoulders of most American adults, and especially Millennials and Gen Z-ers. So, why aren’t high school students and why aren’t college freshmen being taught how to stay out of debt? Conspiracy theorists might say it’s because the government wants citizens to rely on it to ‘save them’ or because government is in league with lending institutions to hold people hostage in poverty for many years of their adult lives.

Millennials and Gen Z-ers complain about the world they were left by the choices of previous generations. They have many legitimate gripes; most of us have the choice now to adjust to the reality of the world now. You’re right; it’s not fair that the FICO score rules your life and your opportunities. Yes, there may be a recession on the way; interests rates may rise; groceries, gasoline, rents are going up, and a serious accident or illness may cause financial disruption. So, being financially literate and disciplined help you to live even when life shifts. Other than war, most of the circumstances can be planned for if your balance sheet shows zero on the ‘owe’ side.

I was a professor in higher education, so, you may be surprised by this statement from me: everyone doesn’t need to go to college. Everyone can curate a healthy adult life, and one factor in that pursuit is to remain as debt-free as you can. If you want to or need to go to college to prepare for adult life, then, don’t take financial aid from the government to do it. Work and go to college part time. Work and save; then start college. Go after scholarships and grants. If your grades are too low or you didn’t score high enough on your ACT or SAT tests, go to a local community college to focus on bringing up your grades, then, show the bigger universities you are a ‘proven commodity’ so that you are in a better standing for scholarships. Research and apply for grants. Do anything to avoid getting clapped into the financial aid shackles. If you are planning to work in a much-needed trade and you must earn certifications, you can research to find businesses in your chosen trade who may sponsor you and provide apprenticeships that pay you while you are learning the trade and passing the tests. Search for ways to become a great plumber, electrician, machinist, tech specialist, etc., without going into debt.

Being financially literate and acting in financially solid ways will bring you more peace of mind. A mortgage is an understandable debt, but credit card debt, student loan debt, and car loan debt are traps. At times in my life, I’ve run up a credit card and taken out a car loan too. Focusing on paying off debt quickly by denying myself, by not treating myself when I didn’t have the cash on hand took discipline and wasn’t fun eating boxed mac and cheese or ramen noodles for every meal; still, it brought me great satisfaction to watch my finances go from being in the red to being in the black.

How do you increase your financial literacy? Educate yourself. While there are many financial courses and workshops, books, and blogs available, I highly suggest you check out Dave Ramsey’s philosophy and practical techniques at https://www.ramseysolutions.com. From his books to his Financial Peace University, there is something for everyone and age groups from small children to adults. Soon, I am offering the course, locally, in Ramsey’s Foundations of Personal Finance: High School Edition. If you are local in northwestern Louisiana, and are interested in taking the course for you or for your teens, please let me know. Soon, I may also offer the course over Zoom; if you are interested, please let me know.

I want to be a statistic by being debt-free; I choose to be unusual by being debt-free; I experience peace by being debt-free. It’s not easy to live debt-free in our culture of consumerism and impatience to ‘have it all’; still, it’s worth the journey to financial stability.