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How often have you heard jokes about learning "the mitochondria is the powerhouse of the cell" in school, but not how to do taxes? When I tell people I'm a sixth-grade math teacher, they often say, "Oh right, a² + b² = c²."  But when it comes time to tip the waitress, they are left clinging to their iPhone's tip calculator.

These real-world skills are all part of financial literacy. You are reminded how important these skills are when you're attempting to create a budget, or when you're pulling your hair out during tax season. If financial literacy is crucial for everyday life, why doesn't it get more air time in school?

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What is financial literacy?

Financial literacy refers to the skills you might call on when choosing what to do with your money. It includes the basics of money management: budgeting, saving, borrowing, and investing. Sometimes these decisions are minor such as looking at your bank account and deciding if you really should make another Amazon purchase this week (..or today? No, just me?). Other times the stakes are higher, and you have to decide how much to contribute to your 401K each month.

Great decisions can not only help you purchase a home, pay for your child's education, and set you up for a happy retirement, they can also put you on a path towards generational wealth. On the other hand, uninformed decisions could leave you in a mountain of debt.

Unfortunately, the vast majority of Americans fall in that second category-

• 2 out of 3 families lack any type of emergency savings
• 78% of adults are living paycheck to paycheck
• Almost 3 in 4 workers are in some form of debt, many believing they always will be

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Who has access to financial literacy?

With such high stakes, you'd think this type of curriculum would be a top priority for schools, right? Wrong. Only 7 states currently require a financial literacy course for high school graduation. Outside of those states, 1 in 9 students will take a financial literacy course before graduating.

And that's just high school. Children are ready to count money and learn about savings by age 6, when financial attitudes, habits, and norms begin to develop. However, financial literacy curriculum is almost non-existent in elementary and middle schools.

Already scarce access to financial education drops off even further for underserved students. In schools where over 75% of the student population is Black and Brown, only 1 in 14 students are guaranteed access to a personal finance course. Only 1 in 13 students has access if they attend a school with 75%+ Free and Reduced Lunch. Even when financial literacy is offered as an optional course, affluent students are more likely to opt-in.

These racial and socioeconomic disparities have real-world consequences. In 2016 the average net worth of a Black family was $17,150 compared to $171,000 for a white family (nope, not a typo). Additionally, more than 12% of Hispanic households don't have a bank account, which is key to financial security.

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Why is financial literacy important?

Teaching financial literacy pays off. Big time. Research has shown that:

• High school students who had access to financial literacy programs had higher credit scores and were less likely to default on loans.
• Students who took financial education courses reduced their likelihood of running a credit card balance by 21% and reduced their private loan balances by roughly $1,300.
• Students who took a personal finance course were significantly less likely to borrow payday loans, saving them from high interest rates and debt cycles.

Teaching the basics of money management helps students build healthy habits early, and have more time to apply what they learn. Expanding access to financial literacy has the enormous power to increase economic mobility, decrease the wealth gap, and lead to a healthier economic future.

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What can I do to promote financial literacy?

If you're an educator, teach financial literacy!

The top 2 reasons educators site for not teaching financial literacy is that they lack the time or they lack the resources. If you can relate, check out these easy to incorporate resources and lesson plans.

• Short on time? Implement a classroom economy system. This classroom management strategy allows you to teach financial literacy through experiential learning, while also building a positive classroom culture. Sign-up for ClassEquity to get started!
• Short on resources? Next-Gen Personal Finance provides out of the box curriculum that explicitly teaches financial literacy to middle and high schoolers.

Even if you're not an educator-Advocate for financial literacy in your state

Students are hungry to learn real-world skills, and the majority of Americans agree financial literacy should be taught in schools.

• Check out this podcast to learn more about how you can support the financial literacy movement.
• This advocacy playbook provides step-by-step instructions on how you can advocate for your local schools to provide financial education to all students.

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‍Questions? We'd love to hear from you! Shoot us an email at info@classequity.com, or contact us here!