As early as the academic years of high school, teens are taught of almost every subject and aspects of life in order to get them ready for greater responsibilities and obligations of a matured adult life. Since the younger generation has the ability to absorb knowledge at a faster pace as compared to the adults, the teen period is considered as the best age bracket to instill the most important lessons of life. As a result, there are increased chances of preserving the ideals in their minds which may become useful once they step into adulthood.
In a more specific perspective, the same principle is applicable as to when the basics of financing, such as budgeting and savings, should be taught to the young ones. The idea here is that wisdom about money matters acquired at the age of 16 is a lot easier to retain than maybe some ten years after in his or her life. That is why it is important that teens should be equipped with financial literacy before they embark on the complexities of adulthood.
Financial literacy can be defined as one’s idea of how to utilize his or own knowledge and skills in effectively handling money in the right way. However, learning financing is not an easy one shot deal. Like any other principles, it is a lifelong process. It may start from something simple such as saving some bucks and dropping them into a piggy bank and then may progress into the more complicated tasks of taking hold of risk and asset allocation matters.
The best way to start the financial education journey is to learn the value of monetary carefulness. It is wise if they know that it is not a good idea to spend all their earnings on impractical stuffs they have never actually used, a wardrobe change that amounts to as much as a one-month salary and an entire way of living that they can’t really afford. A study showed that college students who have basic financing subjects during high school are more responsible spenders than those who did not have.
Another essential concept is teaching the teens to learn how to delay their gratification. This simple thought can be applied in everyday experiences such as being impulsive in buying stuffs online and splurging the allowance on something that a friend has. One significant principle of delayed gratification is embodied in the Stanford marshmallow test, a popular psychological study about the relationship between delaying wants and long term accomplishment.
Becoming wealthy in the future is an interesting topic for teens. It will also capture their attention if they learn that foregoing a pair of new sneakers or not buying a new smart phone can make them billionaires several years from now. Using one of the fundamental concepts of high school algebra, exponential growth can give a clearer picture of how investing starting from the age of 20 with 10 years to invest is different when someone decides to start it at 40 but invests for 20 years. It will be surprisingly correct to see that starting to invest at a much later time but saving for a longer period will result to fewer savings.
Personal finance is one of the most engaging subjects for teens to learn nowadays. It will be a very applicable and vital knowledge they can use in day-to-day experiences and even success in the future. That is why it is essential that high schools integrate financial literary in their curricula to hone money-conscious citizens.