In 2025, with inflation rising, student debt growing, and the cost of living increasing, students need to know how to manage money wisely. But the reality is: many teens leave school without understanding budgeting, credit, or saving.
What Is Financial Literacy?
According to experts, financial literacy is the ability to understand and apply financial concepts in everyday life. This includes knowing how to create a budget, track expenses, manage savings and investments, and plan for long-term financial goals such as buying a house or retiring. Moreover, it involves understanding how credit works, how to avoid excessive debt, and how to make smart financial decisions.
As True Tamplin explains, “It is a lifelong learning process that helps individuals build wealth wisely, manage debt, and plan for a secure future”(Finance Strategists, 2025).
Why Is Financial Literacy Important for Students?
Many college students today are unprepared to handle their personal finances. For instance, a report from U.S. News reveals that students often lack knowledge of basic concepts such as interest rates, student loans, credit scores, and budgeting. Without these skills, they are more likely to fall into debt, default on their student loans, or damage their credit history early in life.
Furthermore, Andrea Janssen, Interim Director of the University of Montana’s Financial Education Program, warns that the lack of financial literacy can lead to “unnecessary debt or student loan default.” Therefore, in a time when financial mistakes can have long-term consequences, giving students the tools to understand their money is more essential than ever.
Are Schools Teaching It?
Some progress is being made in the U.S. education system. For example, as of late 2022, fifteen states have made financial literacy a graduation requirement, meaning students must complete at least one semester of personal finance education. However, the majority of states — forty-two to be exact — still lack such policies. In those states, fewer than one in ten students has guaranteed access to a standalone personal finance course (U.S. News, 2022).
This highlights a major gap in preparing young people for adult life, especially when they’re expected to take on student loans, pay bills, or make major financial decisions shortly after high school.
How Can Students Learn Financial Skills?
Whether your school offers it or not, students can start learning today with free resources like:
- Khan Academy’s personal finance lessons.
- Budgeting apps (e.g., Mint, YNAB)
- YouTube channels focused on teen money tips
- Blogs and podcasts on money management
Parents, mentors, and teachers also play a key role. Learning how to track spending, avoid credit card debt, and save for goals can set young people up for life. Teaching financial literacy to students isn’t just helpful it’s necessary. Every student should know how to budget, save, invest, and make smart financial choices. As schools and families work together, we can help the next generation avoid common financial mistakes — and build a more secure future.
References:
Wood, S. (2022, December 8). Financial Literacy: What College Students Need to Know. U.S. News. https://www.usnews.com/education/best-colleges/paying-for-college/articles/financial-literacy-what-college-students-need-to-know
Tamplin, T. (2025, January 24). Financial Literacy. Finance Strategists. https://www.financestrategists.com/financial-advisor/financial-literacy/
