Financial Literacy as a Foundational Life Skill by Caylen

Financial Literacy as a Foundational Life Skill by Caylen - June 2025 Scholarship Essay

Did you know that nearly two-thirds of Americans can’t pass a basic financial literacy test? In today’s world, money plays a role in nearly every aspect of life—yet many students leave school without the knowledge they need to manage it wisely. Financial literacy, the ability to understand and apply financial skills such as budgeting, saving, and investing, should be a required course in schools. It prepares students for real-world responsibilities, helps prevent debt, and promotes smart financial habits that can last a lifetime.

First, financial literacy equips students with the tools they need to function independently in the real world. From managing a budget to understanding how credit cards and loans work, these are essential life skills. Students who take a financial literacy course learn how to open a bank account, use credit responsibly, and avoid common financial mistakes. Those who learn how to manage money in high school are more likely to achieve financial stability as adults. Without this education, many young people struggle with basic financial tasks that are necessary for everyday life.

Second, financial literacy can help prevent students from falling into debt. Many college students take on loans without fully understanding the repayment terms. Others begin using credit cards without realizing how quickly interest can accumulate. A financial literacy class can teach students about saving, investing, taxes, insurance, and planning for the future—including retirement. By gaining this knowledge early, students are more likely to make informed financial decisions and avoid costly pitfalls. For instance, someone who understands how credit works is less likely to max out a credit card or take on unnecessary loans.

Additionally, my own experience with a high school financial literacy class made a big difference. Before the course, I didn’t know how to track expenses or set financial goals, and I often spent money impulsively. The class taught me how to create a budget, prioritize needs over wants, and save a portion of any income I receive. These lessons gave me confidence in handling money and helped me avoid mistakes, especially as I’ve taken on more financial responsibility in college.

In conclusion, financial literacy should be a required course in high school. It gives students essential life skills, helps them avoid debt, and encourages responsible financial habits that benefit them long after graduation. If high school is meant to prepare students for the future, it must also prepare them to face real-world financial situations with confidence and competence.