Why is it important to teach students about finances from an early age?

Photo by Mikhail Nilov

Worrying about budgets, loans and credit scores is a uniquely adult responsibility – most children won’t need to think about these life skills before they go to college. However, there’s no harm in being prepared. That way, when students step out into the world, they’ll be able to hit the ground running and have the knowledge and confidence to make financial decisions that are right for them. 

As educators, we have a profound responsibility to prepare our students for the future, not just academically but also in practical life skills. In this post, we explain why financial literacy should be part of the curriculum from an early age.

You’re helping them to be independent

One of the primary benefits of teaching students about finances early is that it helps cultivate a sense of independence. Financial literacy empowers students to make informed decisions about their money, which is a cornerstone of independent living. For example, by showing students how to create and manage a budget, we provide them with a practical tool for financial planning. Budgeting helps students prioritize their spending, save for future goals, and avoid unnecessary expenses. These skills are vital for achieving financial independence in adulthood.

Integrating financial lessons into everyday classroom activities – such as managing a classroom “store” or planning a mock investment – can make learning about money engaging and relevant. These real-world applications reinforce the importance of financial independence and prepare students for future financial responsibilities.

They can make the most of their savings

Early lessons in savings can significantly impact students’ financial well-being in the long term, giving them the best chance to maximize their money. Explaining how their savings can grow over time with compound interest can motivate them to start saving early, even when it’s tempting to spend their allowance or earnings straight away. This knowledge can lead to substantial financial gains and a more secure financial future.

Additionally, encouraging students to set short-term and long-term financial goals helps instill the discipline of saving. Whether it’s saving for a new gadget, a college fund, or a future investment, goal-setting teaches students the importance of delayed gratification and strategic planning.

Help them avoid debt

One of the most pressing issues facing many young adults today is debt. Unfortunately, it’s not always avoidable – but financial education can play a crucial role in helping students avoid owing money unnecessarily. Teaching students about credit, including how it works and its long-term implications, can help them make informed decisions about borrowing when they get to this stage in their lives. They need to understand that while credit can be a useful tool, it must be managed responsibly to avoid accumulating excessive debt.

On top of this, financial education can also make students aware of predatory lending practices and high-interest loans. It can feel easy to click ‘pay later’ when shopping online in order to afford the next new thing, but without careful consideration, this can spiral out of control. Instilling responsible spending behavior from an early age can help ensure your students grow up with a level-headed attitude.

Play a positive role in their future

The years a young person spends at school are crucial for shaping their outlook and attitude towards the world around them. By focusing your lessons around life skills, not just exam results, you can play an important role in the future of every student you teach.

Author bio: Clare McKenzie

A high school math teacher, Clare wants to remove the stigma and mystery around financial topics. She believes that all students should learn about money from an early age in order to give them the best chance at a secure financial future.