The importance of financial literacy for our students (and their parents).

As I was sitting here in my office today, I overheard a colleague spend 45 minutes with a student reviewing the financial pros and cons of attending a college that would cost her $50,000+ a year versus staying local at one costing in the mid single digits. This has echoed many similar conversations to nes I have had with students in the halls of my upper school. Late April might not be the best time to be exploring those options and calculations with a 1 May acceptance deadline quickly approaching.

It struck me that this Financial Literacy and topics such as this one should be taught at the middle school and high school level, not so much as an elective as it is at my fine institution, but rather as a mandated class. Often times parents might be very adept at their day jobs, but not quite as equipped to assist their loved ones with crucial financial decisions such as this one.  It is not unheard of to have recent college graduates leave the leafy halls of their hallowed institutions and take their first steps in the real world hundreds of thousands in debt. This is akin to hopping on a treadmill as it is already going 10mph. Very tough to stay on for very long, if at all.

It's great to see the more and more states around the country and many countries around the world beginning to mandate this sort of thing. Here are some of the relatively simple, yet crucial concepts that should be covered and understood by all:

• the importance of compound interest (both the positives of gaining it and the negatives of owing it);
• the concept of net present value and how money is worth more today and in the future;
• the key components that go into a good credit score and how to go about improving yours over time;
• the pros and cons of buying a home versus renting; and
• the different types of asset classes that can be used to build wealth, be it equities, cryptocurrencies, bonds, and real estate.

As parents face a choice of where to send their babies to complete their secondary education, I would say that one of the key factors in that decision should be whether or not that schools offers some form of financial literacy program. This will pay great dividends (pun intended) for the parents and students alike. I am happy to be working for such an institution and provide more of that knowledge during the summer at camp. I hope that more parents do the same.