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As a tax practitioner and financial advisor with over 20 years of experience, you'll often hear me say that the greatest tool in your financial-freedom toolbox is time. If you're familiar with compound interest, you know that your money can make money simply by putting it in an account earning interest, such as a high-yield savings account or investment account. Fundamentally, the earlier you start, the more time it will have to grow.
Like compound interest, early financial education can be pivotal in building wealth and a life-long positive relationship with money. Kids can learn about earning income in a lot of ways, including lemonade stands on a hot summer day, exchanging chores for an allowance, bagging groceries at the local supermarket or simply listening to adults in their household talk about money. But these things alone are not nearly enough to teach future adults the complexities of cash and financial management in today's day and age.
The state of California recently announced their high schoolers will soon be required to pass a personal finance class in order to graduate. I strongly believe this should be a requirement across the country as financial literacy classes can help them understand the value of money before they even have their own income. They can learn important concepts like responsible credit card use, how to manage debt, and the power of compound interest. This knowledge sets them up for success when they start working and become financially independent.
While financial literacy programs are beneficial, long-term financial success will require consistent reinforcement of these concepts even after high school. Many people struggle with issues like debt, saving, and sticking to a budget even after taking financial literacy classes. However, if schools across the country began implementing this education into their curriculum, I believe it would elevate our collective literacy and benefit all of us long term.
Our economy revolves around money management, and while parental involvement is ideal, schools can play a vital role in equipping young people with the tools they need to make sound financial decisions.
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About the Author:
David Peters, CPA, CFP, ChFC, CLU, CPCU, CGMA, is the Founder and Owner of Peters Professional Education (petersprofessionaleducation.com) and Peters Tax Preparation & Consulting, PC. David Peters is also registered with the U.S. Securities and Exchange Commission (SEC) as an Investment Advisor Representative (IAR) with Peters Financial LLC. He regularly teaches courses in accounting, finance, insurance, financial planning, and ethics throughout the United States, and regularly contributes regularly to various professional publications, including NCACPA’s Interim Report, SCACPA’s CPA Report, and VSCPA’s Disclosures.
Required Disclosure:
The content presented above is for informational purposes only, is general in nature, and is not intended to and should not be relied upon or construed as a financial plan or financial/investment advice regarding any specific issue or factual circumstance.
Financial and investment advisory services offered through Peters Financial LLC. Brokerage and custodial services offered through Charles Schwab Co. Inc., member FINRA and SIPC. Peters Financial LLC and Charles Schwab Co. Inc. are not affiliated. David Peters also offers tax services through Peters Tax Preparation & Consulting, PC. Peters Tax Preparation & Consulting, PC is not affiliated with Peters Financial LLC and clients or prospective clients are never obligated to use Peters Tax Preparation & Consulting, PC. as part of any financial planning or investment management services offered by Peters Financial LLC.
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