Debt Avalanche vs. Debt Snowball - Two Methods to Prioritize Debts

KY Schools Should Consider Teaching More Financial Literacy 

January 12th, 2018 by Bunch & Brock

Debt Avalanche vs. Debt Snowball - Two Methods to Prioritize Debts

Financial literacy is an important skill that helps consumers understand their personal finances, plan for the future and maximize their success. Financial literacy can also help consumers avoid serious problems, such as large amounts of debt they can’t afford to pay. Unfortunately, according to recent studies, many people leave high school without the skills they need to manage their personal finances effectively.

About the Study

Each year, Champlain College’s Center for Financial Literacy conducts a study to determine the level of financial literacy among high school students graduating in all 50 states. Each state receives a grade of A, B, C, D or F, depending on estimated financial literacy among high school graduates in that state. The 2017 National Report Card showed that the state of Kentucky received a grade of “C.”

Kentucky’s grade was low for several reasons. First, the state of Kentucky does not require students to take any class that provides basic financial education before they can graduate. Kentucky does not require its school districts to offer any stand-alone finance classes, either. Finally, Kentucky has no clear procedure in place for measuring student achievement in financial literacy.

Several other states also received a grade of “C,” including Indiana, Mississippi, Nevada, Oregon and Washington. Some states, such as California, Wisconsin and Pennsylvania, received even lower grades. However, other states received grades of “A” or “B,” indicating better financial literacy overall.

Why Does It Matter?

Leaving high school with a basic understanding of money is the best way a student can prepare for his or her financial future. When students lack these skills, they enter the workforce unprepared to manage their own bank accounts, bills, taxes and everyday expenses. For example, students without a good understanding of financial issues may take on large amounts of student loans after graduating from high school, leaving them with insurmountable debt early in life.

Unfortunately, if financial literacy isn’t established before graduation, few people will pick up these skills after high school. In fact, the Champlain College’s Center for Finan­­cial Literacy’s national report card on adult financial literacy gave the state of Kentucky a D+.

What Can Kentucky Do?

Kentucky could improve financial literacy among its residents by changing its graduation and/or education requirements for high school students. In fact, a Kentucky senator has already proposed a bill that would require students to complete a financial literacy program before they would be able to graduate from high school. A similar bill was proposed last year, but was unsuccessful. All of the states that received an “A” on the financial literacy report card require a finance class for graduation.

Currently, some districts in Kentucky offer elective financial literacy courses. To improve their own skills, students are encouraged to take advantage of these courses when possible.

What does Bunch & Brock do?

Bunch & Brock donates its time every year to local high schools to teach seniors how to manage their finances and to be cautious of ‘free’ credit cards when attending college. The CARE program educates young kids to keep from getting behind the proverbial eight ball with their personal finances and to steer clear of credit care abuse. To learn more, please contact Bunch & Brock.

Dealing with Financial Problems

A lack of financial literacy often leads to serious financial problems, such as credit card debt, loan debt and more. If you are dealing with these issues, you may feel like you have no hope. Fortunately, the state of Kentucky offers bankruptcy protection to consumers who cannot afford to pay their debts. If you are struggling with more debt than you can afford to pay, please call Bunch & Brock today at 859-254-5522 or contact us online to discuss your options.