Providing Financial Knowledge to High-School Students Improves Their Well-being
New research published in the March 2014 issue of the Journal of Economic Literature demonstrates the economic value of providing instruction for young people in finance and economics. The study shows that “providing pre-labor market financial knowledge to [high-school graduates] improves their well-being by…82 percent of their initial wealth.” That is a huge impact! We should all feel a sense of urgency to educate young people.
On May 15th AIER staff participated in a financial literacy seminar for Miss Hall’s School in Pittsfield, MA. The seminar was the culmination of the project designed and coordinated by two students from Miss Hall’s School, Hallie and Chloe, during their academic year internship at AIER. In the course of their research, the girls found that Massachusetts fails to provide high school students with financial literacy education. That inspired them to organize a half day event for their schoolmates to learn about banking and budgeting.
The session featured a compelling video that demonstrated the lack of financial literacy among young Americans and its implications on our economic future. AIER staff used its Sensible Budgeting with the Rubber Budget Account Book as the basis for a workshop on budgeting. They taught students how to tell the difference between needs and wants when devising a saving and spending plan.
As a concluding presentation, other AIER staff shared their experiences about learning budgeting the hard way – through life experiences. Their stories were well-received and generated several questions about applying financial concepts to the students’ own finances.
The event was gratifying for everyone, and more importantly, it was an important step in helping to increase young peoples’ financial well-being.
[Photo above, from left to right: Theodore Cangero, AIER Senior Research Analyst; Michelle Ryan, AIER Education Programs Coordinator; Hallie Novak and Chloe Kim, Miss Hall’s students; Natalia Smirnova, AIER Assistant Director of Research and Education; Jules Clark, AIER Research Analyst.]