According to Money Magazine, Americans have fallen back in love with debt. Total household debt – a category that includes mortgages, student loans, and car loans along with credit card and other debt – dipped in the wake of the Great Recession, but it has since steadily rebounded in the years since. Overall, Americans’ debt hit a new high of $13 trillion last year. Here’s how much Americans owe overall, broken down by age group:
- Under 35: $67,400
- 35–44: $133,100
- 45–54: $134,600
- 55–64: $108,300
- 65–74: $66,000
- 75 and up: $34,500
All Generations Show More Comfort with Debt
John R. Salter, professor of financial planning at Texas Tech University, noted that all generations show a greater comfort level with debt in all forms. “This idea of saving for what you need and buying it outright has diminished as people have become more comfortable with financing,” Salter says. That could pose a problem later on, he adds: “These norms come with the future risk that you will be able to pay it all off.”
Fewer Than Half the States Require High School Finance Classes
According to US News, the number of states that require a high school personal finance course in order to graduate has been stagnant at 17 since 2014. Likewise, only seven states have required standardized testing on personal finance since 2016. “Thinking back 10 years ago to the financial crisis and all the work that people had done to dig out of that, the fact that … we’re seeing this status quo as far as states picking up the charge, it’s a little disappointing, to be frank,” says Christopher Caltabiano, chief program officer at the Council for Economic Education. The CEE’s mission is to help teach personal finance and economics to students from kindergarten through 12th grade. And part of its aim is to officially add financial education to state-required curriculums, complete with standardized testing.
Will Financial Education Help Reduce Future Personal Debt?
All of this debt begs the question – should financial education be required in high school to teach students about personal finance including credit cards, banking, debt load, interest rates, and more? The answer is not clear. In another US News article Do Financial Literacy Courses Work?, we found conflicting opinions:
The Pro Education Argument
Financial literacy belongs in the schools, says Annamaria Lusardi, academic director of the Global Financial Literacy Excellence Center at George Washington University’s School of Business in the District of Columbia. Lusardi cites, among other papers, a recent meta-analysis of 126 studies that found that financial education has a significant impact on financial behaviors and financial literacy.
The Con Education Argument
Pension fund analyst and fiduciary expert, John Lohr, cites a study in 2014 by economic researchers from Harvard, Wellesley College and the Federal Reserve Bank of Chicago, which concluded, ‘State mandates requiring high school students to take a personal finance course have no effect on savings or investment behavior.’
Rise Display Provides Tools for Colleges
Will financial literacy improve? Will financial classes become mandatory in America’s schools? The future remains to be seen. Schools that are embracing this need are taking the business classroom to the next level by creating a financial literacy lab. State-of-the-art labs use LED Stock Tickers, LCD screens, and specialized software to turn an ordinary computer lab into the most exciting room in the building. At Rise Display, we supply ticker displays for many high schools and colleges. We hope every American becomes more educated on financial issues whether they learn through school or on their own. Everyone has to deal with money on some level, and being financially savvy can make a huge difference in the quality of your life.