Many young people are leaving school without a basic and vital understanding of how personal finances ought to be managed in the adult world. This lack of knowledge is due to a lack of life experience and limited education which can be solved in two simple ways.
One main reason why so many young people are unable to manage their own finances upon finishing high school is that they have been living along with their parents for free. As a result, they have never needed to earn a salary or save their money in order to pay bills. Another cause is that schools do not factor personal financial management into their curriculum. Schools focus instead on classic subjects, such as maths, geography, history and languages, which means important life skills are not being taught. Both teachers and parents are failing to prepare young people for the real world.
There are two options for solving young people’s inability to manage personal finances. Firstly, parents should spend some time with their children teaching them how money is earned, budgeted and used for either savings or expenses. One simple step could be for parents to start teaching young children how to manage their pocket money and as, their child grows up, expand into more serious household expenses. Secondly, schools should incorporate life skills into their curriculum for final year students. In this way, children will be able to learn in a supportive environment how their finances need to be budgeted and managed to avoid debt problems later in life.
In conclusion, young people lack financial management skills due to the negligence of parents and schools, which can only be solved if both take more responsibility for equipping school leavers with the right skills.