Budgeting, Saving and Spending Habits are Some of the Lessons Learned

In our last blog post we talked a little bit about the severe lack of financial literacy in the United States and offered a quiz for you to see where you fell on the scale. If you got less than half the questions incorrect, don’t feel too bad: in a 2008 nationwide financial survey, high school seniors answered less than half the questions correctly. 

Basic finance is an important life skill that should be taught
at a younger age to help build good habits.

It’s been proven in numerous studies that kids who are taught how to manage their finances at an early age have better money habits throughout their lives than those who don’t. However, is personal finance something that should be required in schools around the country? There are pros and cons to requiring personal finance classes:

Pros of Personal Finance Education

·         You’re more likely: to save money, use a budget, invest wisely, acquire less debt and pay off debt easier

Cons of Personal Finance Education

·         Additional costs for teachers and materials

·         Can’t ensure follow through or personal responsibility

The ultimate argument against requiring finance education courses is the 2008 recession. But could the recession have been prevented if finance courses had been required 20 years ago?  Oddly enough, a 2013 study by investment giant Fidelity showed that since the 2008 recession there has been in an increase in savings, retirement and emergency fund contributions. Perhaps we need a little pain to motivate us.

Still, Americans owe over $850 billion in credit card debt, 55 percent of U.S. adults spend equal to or more than their income and over half U.S. adults don’t use a budget. These problems can be solved by providing basic lessons in budgeting, saving and spending money wisely to reach goals. Requiring a semester-long personal finance to help students learn these things is not unreasonable.

As a community-focused bank, Lincoln Savings Bank wants our customers to make informed financial decisions. That’s why we offer the LSBPlus program for financial guidance and will gladly speak with you if you wish to know more about a certain topic. Together we can help each other make responsible financial decisions for a more financially stable future.

Lincoln Savings Bank, Member FDIC