Lack of financial literacy in childhood education proves to be a concern for students

If you don’t know how to file taxes or understand how inflation works (why can’t we print more money again?), you aren’t alone. Many students at Toronto Metropolitan University (TMU) say they would like to see more financial literacy being taught from a younger age.

Micaela Schaefer, a third-year creative industries student, said financial literacy is an important skill all students should have, especially by the time they reach university.

“We have so many financial obligations, especially going to school,” she said. “I'm in one course that teaches stuff like this, but that's the only course I've ever gotten in my entire life, and I'm 21 years old, so it seems a bit late for it.”

Julien Meyer, an assistant professor of health services management at the Ted Rogers School of Management (TRSM), defines financial literacy as “The ability to understand how to manage money in financial matters,” a tool which TMU students say they are lacking.

According to Anisha Madhukar from business news outlet Financial Express, financial literacy is “ the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources.” Simply, this means that financial literacy is the ability to manage one's own finances.

“ Making informed decisions about economic and financial matters has become increasingly complex. Students need to build knowledge and skills in a wide variety of areas,” the Ontario government's education and training webpage states. “For this reason, we are continuing to integrate financial literacy in a variety of disciplines.”

The site lists that the provincial school curriculum includes mandatory learning about financial literacy in Grades 1 to 8 mathematics, Grade 9 mathematics and the Grade 10 career studies course.

However, according to the Financial Post, financial literacy was only introduced into the Grade 10 career studies course curriculum in 2019 when Stephen Lecce first became Ontario’s education minister.

Yi Feng, an associate professor of finance at TMU, explained how her young kids are currently being taught about how to calculate tax on a purchase or how a discount will affect the total price of a purchase—identifying a shift in the curriculum.

“In the past, I knew that some students had only taken accounting courses in high school, but there's no particular finance courses in the high school curriculum,” Feng said. “However, it seems that many students are now learning finance concepts and they're starting in elementary school.”

In an article for Forbes, Sam X Renick, the co-creator of Sammy Rabbit—a children’s character and financial literacy initiative—said “He has found that the earlier you start a child’s financial education process, the better. Lessons should begin before age seven, he says, because research shows that money habits and attitudes are already formed by then.”

Meyer explained that getting a financial education doesn’t necessarily have to take place in a classroom. “I would think that family would be the first place where this education should take place,” he said.

“There's typically no direct financial relation between students and teachers, or school administrators…it's always better training when it's connected to actual actions, decisions and behaviour.”

However, for some first-generation students, financial literacy isn’t so easy. The Eyeopener previously reported on a students' first-hand account growing up in a home where financial literacy was not strong, thus couldn’t be passed along to them as kids.

For this reason, some students solely depend on their in-school learning to prepare them for what's to come in the future. However, there are still other resources.

Richard Deklerk, an instructor in the hospitality and tourism management department at TRSM, thinks that while students should be taught financial literacy as part of the secondary education curriculum, they can also seek out knowledge on their own time.

“I think high schools should definitely talk about overall consumer business; the reason why we buy stuff,” he said. “Start by just asking yourself, ‘what do you not know? Where to look?’ Start with the Internet!”

As the economy shifts, knowing how to choose a mortgage may seem like a bigger task than before. It seems that educators are now realizing the importance of offering financial education.

Despite the recent additions to Ontario’s curriculum, many students, especially those who graduated high school well before the change, still don’t understand simple money management.

“Financial literacy is indispensable in everyday life…especially nowadays when we are in such a high inflation economy,” said Feng.

Jewel Wallace, a first-year psychology student, said they feel that instances like this are stressed on as important to know for our future, and yet students are leaving high school without much knowledge on the topic.

“A lot of students, like me, don't know how to handle their money, and there’s not a lot of classes teaching us how.”

Some students fear that not being financially literate could backfire on them when working with different institutions, like banks or accountants. According to Vice, some private loan companies will offer you a low interest rate for a few years before adding a massive annual percentage rate (APR) to your monthly payment.

Andrea Mejia, a fifth-year creative industries student, said, “All these big corporations and banks aren’t necessarily with you as much as they say that they are. If you don't fully understand how investments or anything like anything like that work, you can get tricked.”

Mejia added that with financial literacy comes financial independence, and with an ever-changing economy, knowing how to properly manage your money without depending on others can be crucial.

“If school is supposed to be building us for our future then they should teach us those skills that are going to help us in the future.”