By Chris O’Shea* The results are in: Giving kids early financial education pays off in smart money decisions down the line. In one study, from the National Endowment for Financial Education, kids who participated in financial education courses made better choices when it came to paying for college.
The study found that students who took financial literacy courses from an early age were more likely to apply for low-cost loans and grants to help pay for college. They also were less likely to use private loans or carry high-interest credit cards. As MSNBC reports, this finding is important for a couple reasons. First, the report shows financial education can help young people avoid crushing student loan debt. The study is also important because other studies have shown that when students are aware of higher education payment options, they’re more likely to attend college.
The connection between financial education and smart money moves isn’t limited to paying for college. In one study, kids who were taught financial courses had higher credit scores. In another report, a positive correlation was found between teenage financial literacy and net worth.
Adults aren’t off the hook either. Multiple reports have found that the more financial literacy adults have, the better money moves they make. Adults with high financial literacy are more likely to make timely loan payments and less likely to have high amounts of debt. Clearly, there is little downside to teaching and focusing more on financial education.
*This guest article is from the “Your Money Blog” in ‘Mid Oregon’s Digital Banking Credit Savvy. resource’. It is made possible by Savvy Money. “Teach It: Studies show financial education pays off” by Chris O’Shea was published in April 2021.