As unemployment plagues America’s youth, financial literacy has become more important for young people.(ALEX THOMAS/MNS)
WASHINGTON — America’s youth is getting hit hard by unemployment, but are schools doing enough to help?
Experts argue America’s young people are not as financially savvy as they should be. Since many high schools do not offer any type of financial education classes, students are graduating and heading off to college without a clue of how to manage their own finances.
“I’m really not confident,” said 18-year-old Johanna Gearay, “because if I go away to school and I’m away from my parents’ house, then I’ll have to budget my food and other necessities that I’ve never really put thought into before now.”
Youth unemployment recently hit a record high, with 25.9 percent of 16 to 19-year-olds unemployed. The same rate in the Latino community hit nearly 34 percent, which was three times the rate for whites. Dr. Algernon Austin, racial relations expert at the Economic Policy Institute in Washington, D.C., said this lack of financial awareness among high school students is only making the situation worse.
“By the time students reach college-age, they receive many credit card offers…So it’s really important, given the easy availability of high-interest credit, that young people be educated about what credit cards mean, and what it means to develop a positive credit history.”
Dr. Austin said this understanding is even more important in the Latino community, where young people have been disproportionately affected by unemployment, as well as corrupt lending practices.
“Unfortunately, the financial services that [minorities] have access to, more often than not, tend to be predatory. So this means they charge extra high interest rates.”
In an effort to confront the problem at the high school level, the Congressional Hispanic Caucus Institute joined Visa Inc. and the international soccer organization FIFA to launch Financial Soccer, a free internet game that teaches America’s youth about personal finances.
“It’s great having [financial education] integrated into a soccer game like that,” said Veronica Covarrubias, a counselor at Wakefield High School in Arlington, Va. “Soccer is a universal sport and everyone loves soccer, and now the kids are competing. The goal is to win, and the only way to win is to answer the questions correctly, so you have to know the information.”
Although Covarrubias said the new game is a great way for high school students to learn more about finances, there still needs to be much more economic education available to these students throughout their high school curriculum.