Education - Personal Finance 101

By Derek Waleko

Implement Personal Finance classes in our public high schools

LAUSD does not teach our future generation about personal finance. Nowhere from K-12 are mandatory classes being taught that cover basic finances, such as credit scores, tax preparation, online banking, creating a budget, paying bills, student loans, credit lines, understanding job benefits, or even opening a savings account.

Oftentimes parents don't talk to their kids because they themselves were never taught and school curricula doesn't give teachers an opportunity to talk to their students about personal finance. As a result, a cycle is produced where our youth and young adults grow their debt, have low credit scores, have trouble owning a home, live paycheck to paycheck, fall victim to bank fees, predatory lending, engage in illegal methods to earn a living, and in the end have little to nothing for retirement.

Too many are falling out of the middle class because of this cycle and we must empower our youth to understand and responsibly handle money. Between 2005 and 2009, Latino households' assets fell at a staggering 66 percent, from $18,359 in 2005 to $6,325 in 2009, compared to a 53 percent decrease for black households and a 16 percent decline for white households (Kochhar, Fry, and Taylor 2011). The great recession of 2008 may have looked different if predatory lenders had faced empowered Americans who were armed with financial literacy.

Also, one of the first forms of debt our students take on are student loans. This is serious debt that follows our youth into their 40s and 50s. Being empowered and understanding the basics of responsible money management will help our future generation make smart decisions about college paths and student loan debt, such as paying lower costs by attending community college and transferring to four-year universities. A simple idea that will save tens of thousands of dollars after graduation.

Utah, Missouri, Tennessee, and Virginia have already taking the steps to empower their students and California must be next. I will work with non-profits like the National Endowment for Financial Education and the Jump Start Coalition to ensure our school system mandates that one semester of personal finance be taught in 11th grade in our high schools as part of its core curriculum. Every student should be empowered with a basic understanding of their personal finance so they can be on a path to a secure future.