Tax day: Financial literacy lacking among teens

(The Center Square) – This tax day, one group is pushing for better financial literacy for kids.

The American Parents Coalition is advocating for financial literacy education for kids, arguing that studies show students who go through these classes are less likely to fall into financial trouble.

In a message to parents called “The Lookout,” the group points to a survey showing the majority of teenagers feel unprepared and want more financial training. 

“In fact, three out of four teenagers admit they don’t understand basic financial concepts,” the group said in its message, first obtained by The Center Square, and sent to parents Tuesday. “Half can’t explain what a 401(k) is, and more than one in four can’t tell the difference between a credit card and a debit card. Make no mistake, financial literacy programs are crucial and can be integrated into virtually evert grade level, from elementary and middle school to high school and college. The problem is many schools do not incorporate or require classes that teach these practical skills.”

“Some studies have shown that kids who grow up with good money habits are more likely to become financially independent, make smarter decisions with regard to debt and income, and be prepared for unforeseen emergencies,” the group added.

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Most states do not require financial literacy classes in their curriculum. 

“According to one 2020 study, individuals who take financial literacy courses have fewer loan defaults and higher credit scores,” APC said. “Unfortunately, only half of states currently require high school students to be educated in personal finance, and of these states, only 11 currently require the class to be a separate course.”

This Tax Day, many parents will wrestle through the tax law complexities, or hire someone to help. Most of them learned the hard way how to pay taxes, manage debt, take out a loan and more. 

APC argues learning the hard way isn’t the only option. They say parents can start simply by paying kids for chores, helping them open a bank account, and teaching them to save money. 

“As parents, we work every day to protect our kids and set them up for successful adult lives,” APC Executive Director Alleigh Marré told The Center Square. “Personal finance and financial literacy tends to be a place that's overlooked with so much focus given to the day-to-day needs. This Lookout arms parents with simple tools to build good money habits at home and prepare kids to manage their future with confidence.”