How Home Ec Class Teaches Teens To Avoid BankruptcyAug 31, 2015
How does a teenager learn to avoid bankruptcy? When we’re 16 years old, often the last thing we’re concerned with are our long-term finances. The money made at a teen’s first job is usually either spent out of pocket or put toward a first car, university education, or the like. To think about future debt problems or what the bankruptcy process entails was out of the question.
Yet, many high school students are graduating today without many of the skills necessary to avoid bankruptcy later in life. As young adults, they enter an economy with rising housing prices, a lack of job opportunities, and waxing incomes. Money can get tighter and personal bankruptcy can threaten. If the skills to manage debt and make a solid financial plan are never learned, how will a younger generation respond when GenSqueeze really starts to put them in a vice grip?
Home economics education – especially the financial literacy lessons – are the basic building blocks for fiscal responsibility. As curriculums turn more predominantly toward theory-based learning, today’s high school students are yearning for something with real-life applications. 71 per cent of recent high school graduates agree that more time should have been spent teaching personal finance in school. For those who did take an optional financial literacy course, 84 per cent said it was relevant to their lives.
Debit vs. credit
When teenagers look at debit cards and credit cards side-by-side, they tend to glamorize the latter. Credit cards, like a first car or first apartment, are just another step out of childhood into adulthood. However, without basic money lessons like those taught in home ec class, many teenagers don’t understand the dangers of credit card debt. According to the FCAC, as many teenagers have credit cards (72 per cent) today as do savings accounts (74 per cent). This is a lot to handle at a young age – which can have the unfortunate effect of creating debt before teens even leave the nest.
Think of the positive effect mandatory home ec education could have on this issue. Home ec courses can teach teens about how debit is a safer alternative to credit when you’re first learning personal finances. You’re spending your own money – equivalent to cash – and not having to worry or calculate future repayments. Armed with that knowledge, teens will hopefully make wiser spending choices.
Talking to experts
In many personal finance-based home ec classes, there are opportunities to learn from professionals. Opportunities sometimes arise for Bankruptcy Trustees and Chartered Professional Accountants to visit high schools and share their knowledge with teenagers. Topics such as how to create a budget, good debt vs. bad debt, the tax breaks of owning your own business, and a general explanation of the bankruptcy process give teens necessary knowledge they’ll need to be fiscally responsible adults.
The bottom line is, mandatory home economics education in our schools teaches our youth the importance of money, saving and planning for their future. As GenSqueeze becomes more and more predominant in the current economy, it’s vital that teenagers learn basic literacy skills before they enter the job market.
Have you experienced GenSqueeze and feel home economics education could have helped you? Join the conversation on social media using the hashtags #LetsTalkDebt and #BDOdebtrelief.