I think schools have failed millennials when it comes to financial literacy

I got a 4.5 GPA in high school and graduated from UCLA in 2011, my dream college. I accomplished exactly what society told me I had to do to be successful. I was on top of the world!

Then I graduated and was unemployed for 12 of the next 24 months. The rest of the time I did $10/hour internships. I lived at home with my parents, dependent on food stamps and depressed.

This experience made me realize what I would have liked to have learned in school: how to make and manage money.

Like me, many millennials felt cheated after we graduated. We took on a lot of student debt only to find out college doesn’t guarantee the American Dream. We are the most educated generation, but financially worse off than our parents.

After graduating from my dream school I was unemployed for a year, living at home with my parents, on food stamps and depressed.

Helen Zhao | CNBC

Yanely Espinal, director of education at Next Gen Personal Finance, had the same revelation after graduating from Brown University in 2011. She lived paycheck to paycheck, just like her immigrant parents, who never finished elementary school. “I think a lot of people feel like the education system has let them down, especially for millennials,” says the 32-year-old.

According to FINRA’s 2018 National Financial Capability Study, on average, 18- to 34-year-olds can only correctly answer about 2.5 out of six key financial literacy questions. Only 17% of people in this age group got four or more questions right, up from 30% in 2009.

Experts say that in today’s world it takes more than just a college degree to be successful. Life in America is increasingly a sink or a swim, as evidenced by the widening gap between rich and poor. Essential expenses have become more expensive while wage growth has been negligible.

Consumers also have easier access to a wider range of financial products, including complicated investments and loans. This is why experts say you need to be smarter than ever when it comes to making money and managing risk.

“We have to make all these new decisions that, by and large, our parents and grandparents never had to think about,” says Olivia Mitchell, professor of business administration and public policy at the University of Pennsylvania’s Wharton School.

Marina White teaches Canyon High seniors a lesson on investing and the power of compound interest.

Helen Zhao | CNBC

Now, high schools are scrambling to better prepare Gen Z for the real world.

The number of states that require, or will soon require, students to complete a personal finance semester to graduate has doubled from 5 to 11 in the past three years in the class of 2008. In March, Florida became the youngest and largest state to require students to complete a semester on personal finance in order to graduate.

In the 2020-21 academic year, 7 out of 10 public high school students had access to a full semester of personal finance. as an elective or degree requirement under Next Gen Personal Finance. That’s an increase of 2 from 3 in the previous school year.

Here’s how the financial literacy gap has impacted millennials and what high schools are doing about it.

“Poverty will be passed from generation to generation if this curse is not broken”

I never learned about money at home because my US immigrant parents focused on assimilation and just making ends meet financially. They also didn’t learn anything about personal finances while growing up extremely poor in China. Their upbringing meant changing clothes every few months, dreaming of eating meat and eggs, and even sleeping in a cave some nights while they were forced to work as farmers in the countryside during the Cultural Revolution.

Like me, not everyone grows up in a financially savvy household. For this reason, advocates of financial literacy fight for students to learn personal finance in school. Many of the students who need it most are not learning it at home.

My parents, brother and I pose for a family photo in the 90’s.

Courtesy of Helen Zhao

only 15% of parents talk to their kids about household finances more than once a week, according to a recent survey by CNBC + Acorns Invest in You. A quarter of parents talk to their children about money less than once a month — and a third of parents never do.

“Poverty is passed on from generation to generation unless that curse is broken by teaching money and wealth,” says Edwin Gomez, Superintendent of Riverside County Schools in Southern California. “You can be financially free. There are many ways to make money that isn’t just a job.”

NGPF’s Espinal grew up poor in Brooklyn after her parents immigrated from the Dominican Republic with very little formal education. It should be her parents’ ticket to a better life, she says, after graduating from an Ivy League school on a full scholarship in 2011. But as a teacher in her mid-20s, she struggled to pay off $20,000 in credit card debt, helps her family, and makes ends meet every month.

Yanely Espinal

Yanely Espinal

It was then that she began learning how to pay off and avoid debt. “I thought, oh my god, there are some very simple steps and strategies. How come no one ever told me that?” says Espinal. “That was an aha moment. I must dedicate my career to promoting better financial literacy.”

Now Espinal is meeting with politicians, lobbyists and community members to advocate for legislation requiring students to learn personal finance in schools in her role as an advocate for the Next Gen Personal Finance Mission 2030 Fund. As a Miami resident, she played an important role in Florida’s new personal finance education mission.

“Geometry won’t make me a millionaire”

Increasingly, high schools are teaching teenagers key money management skills that I wish I had learned growing up.

I met 17- and 18-year-old seniors at Canyon High School in Santa Clarita, California, who are already making progress toward their short- and long-term financial goals. They learn about saving, budgeting, debt, investing, careers, and more while completing a semester on personal finance. The class meets a math requirement but is not required to earn a degree.

Ryan Leskin used to spend at least $30 to $40 a day eating out. Now he’s brought that down to just about $50 a week and swapped ready-meal trips for grocery stores. He saves money to invest in the stock market.

Ryan Leskin first got into budgeting when he took over personal finance at Canyon High School.

Helen Zhao | CNBC

Genesis Gonzalez teaches her parents how to save and manage more effectively. “Sometimes my mom goes on Amazon shopping sprees,” says Gonzalez. “She realizes she can save a lot more money instead of spending hundreds of dollars on things we don’t need.”

Joshua Frenya says personal finance is one of the most valuable courses he takes. “Honestly, I don’t think geometry will make me a millionaire,” he says.

Canyon High School launched its first personal finance class in 2015, thanks to former teacher Kim Arnold, who brought the school district on board, and local personal finance advocate Brendie Heter, who donated the necessary funds for the curriculum and textbooks .

Genesis Gonzalez teaches her parents finance at Canyon High School.

Helen Zhao | CNBC

By 2018, all nine high schools in the William Hart School District began offering a semester-long personal finance course. A 10th Precinct high school that opened in 2019 with just a ninth-grade cohort will have its first seniors next year — and run its first personal finance class in its favor.

Heter’s adult personal finance students inspired her to finance these courses. “We felt the demand and regret from the adults,” she says.

“The mantra repeated over and over by parents is, ‘I wish they taught that in high school. I wish I’d learned that earlier’ – almost kind of angry with other sponsors and partners in town and saying, ‘Let’s do something about it.’”

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