The week before I walked across the stage to receive my college diploma, I sat through an optional one-hour seminar on how to manage my student loans after graduation. I was handed a single sheet of paper with only three pieces of information on it: my name, my anticipated 1989 graduation date, and $55,000 in bold font to indicate how much I owed in Guaranteed Student Loans.
I had a job offer as a systems analyst at IBM Corp for $18,400 a year upon graduation. I gratefully relied on the offers for free housing from friends and family, maintained a painfully frugal lifestyle, and managed to pay off the loan in five years instead of stretching my agony throughout the 10-year term.
Looking back, I am astounded that I was able to understand the importance of financial responsibility, since the only financial advice I received up to that point had been from my working parents. They made sure I held full-time employment through every summer of my youth and volunteered every weekend at the local hospital where my mom worked.
But how many of today’s adolescents with college aspirations have the benefit of good financial habits and a solid understanding of personal finances? Against the backdrop of steadily increasing college tuition and cost of living, today’s teenagers need a helping hand in understanding and managing their personal finances.
Thanks to a new focus on this critical issue, the State of New Jersey recently passed a law mandating financial literacy instruction for sixth- through eighth-grade students in the New Jersey public school system. Although New Jersey has been teaching financial literacy in some of its middle schools since 2014, through a program called 21st Century Life and Careers, the focus has only been a set of guidelines for what students should know “to be successful in their careers and to achieve financial independence and health.”
Starting September 2019, the new law propels these guidelines forward to make financial literacy a required component of the curriculum in each grade from sixth grade through eighth grade. The new law explicitly spells out topics that middle schoolers will have been taught by the end of eighth grade, including:
- Payroll process: taxes, deductions for various benefits (e.g., medical benefits), taxable income, and employee benefits
- How to build short- and long-term budgets and construct a personal savings and spending plan
- Understanding and determining the most appropriate use of different financial products and services (e.g., ATM, debit cards, credit cards, check books)
- Analyzing the cost of borrowing money using different types of credit (e.g., credit cards, installment loans, mortgages)
- Understanding the causes and consequences of personal bankruptcy, credit scores, and borrowers’ credit report rights
- Examining the implications of legal and ethical behaviors when making financial decisions
Our children’s and grandchildren’s ability to manage their finances will deeply impact every part of their lives after high school – student loans, auto loans, credit cards, jobs, paychecks, taxes, rents, mortgages, medical insurance, savings, credit scores, income tax returns, the list is long. It’s reassuring to know that they will finally receive a basic introduction to personal finances at an early age.
A report on this topic from CNBC is available here.
The full list of financial literacy standards for fourth grade through twelfth grade can be found here at the New Jersey Department of Education’s website.
 New Jersey Core Curriculum Content Standards 21st Century Life and Careers
Written on behalf of Crimmins Wealth Management by Thao Groenewald
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