Preferential access to concert ticket presales and exclusive entrances at popular venues are just two of the ways credit card companies try to entice young people to sign up for their first credit card. Drawn in by benefits such as cash advances, many are not aware of looming consequences like high annual fees or steep interest rates on debt.
A 2022 survey by U.S. News & World Report found that almost half of college students have credit card debt with nearly a quarter of respondents with debts over $2,000. One way to get kids to swipe their cards more responsibly and make better financial decisions overall is financial education. Students from states with high school financial education requirements were 21% less likely to carry a balance on a credit card during college, according to a 2018 economic analysis. Personal finance classes are on the rise with more states making these classes mandatory for graduation. Since 2019, the number of states that guarantee a personal finance course has tripled from six to 18.
“Teachers are eager to teach this course because of the level of engagement they see from their students, because nobody leaves their classroom saying, ‘How am I going to use this in my real life?’ Every day they’re walking out with something that they can bring back to their families or something they can implement in their own lives,” said Tim Ranzetta, who taught personal finance to high schoolers at Eastside College Prep in California. He co-founded Next Gen Personal Finance (NGPF), a nonprofit organization that provides personal finance curriculum and professional development for middle and high school teachers. Ranzetta recommends that teachers follow the four Cs – current, comprehensive, customizable and curated – to create effective personal finance classes that equip students with the skills needed to manage their finances in the real world.
A good personal finance class ensures that students are learning topics relevant to current life, not financial wisdom from a decade ago, according to Ranzetta. “If we’re not talking about current topics, we’re going to lose kids,” he said.
Current financial topics that weren’t popular even a few years ago include cryptocurrency and non-fungible tokens (NFTs). Additionally, Ranzetta has seen sports betting become widely available with nearly half of states now offering online sports betting from mobile phones. Between 60% and 80% of high school students report having gambled for money in the past year, according to the National Council on Problem Gambling. Young men and teen boys are particularly susceptible to gambling and risky behaviors.