Financial Literacy

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This Sunday I am heading to Europe with four of my best friends. In order to make sure we see and do everything under the Tuscan sun, we have to carefully budget the whole trip. While in school, my friends and I have taken language courses to prepare -- but I've been thinking that a lesson on how to handle our cash may have been more useful.

I took an economics class for a semester in high school and can now recite: the concept of supply and demand, how to calculate GDP and how to maximize opportunity cost. But in that class we spent only two days learning about matters of personal finance, like what counts as a liquid asset and how people often run into debt. The California State Frameworks didn't leave much room for teaching about personal and household budgeting, which is why my teacher couldn't go into much depth.

My trip to Europe may be the wake-up call, but it's not what really scares me about my impending financial independence. I start college in the fall, and it will be the first time I'm in charge of my own credit card. What happens when I get my statement, and I don't know how to recognize my own purchases? How will I know how to spot fraud?

There are plenty of examples of how I could go wrong. One recent survey of undergrads found over 7 percent of them had dropped out of college due to debt or financial pressures. And recent college grads who are lucky enough to find a job spend nearly a third of their incomes repaying debts.

The common complaint that high school doesn't teach us what we actually need to know seems trite. But in this case it's true. Which is why I wish it was mandatory in high school to take a financial literacy course -- one that lets you understand credit scores, along with the GDP you learn in econ. Not just learning about the Great Depression or the current recession, but how to avoid our own financial meltdowns in college and in life.


With a Perspective, I'm Maya Cueva.