In the midst of the escalating presidential election this year, there will be a significant focus on influencing the voting behavior of young people. With approximately 16 million young Americans reaching voting age by 2020, it’s a safe bet that political candidates will strive to engage these new voters. Additionally, organizations like Rock the Vote will also seek to mobilize younger citizens.
However, as Americans, we are more than just citizens; we are also economic agents responsible for managing our financial lives. Unfortunately, not all political figures prioritize financial education for young Americans, which can hinder their ability to learn.
Yet, many political decisions inherently involve economic considerations. Citizens equipped with financial knowledge are better equipped to make sound decisions both in their personal lives and in the political arena. When individuals understand the financial implications of their choices, they can make more informed decisions at the polls.
Personally, I sometimes wish I had received more financial education when I was younger. Lessons like “Investing in a home early can build equity instead of spending years paying rent” or “Long-term investment in the stock market can yield substantial returns” could have been invaluable.
Financial literacy provides individuals with the tools for greater financial security at any stage of life. The sooner one becomes informed, the sooner they can progress financially. Without financial education, individuals may encounter a myriad of problems, including debt, financial setbacks, or even foreclosure and bankruptcy.
For instance, in 2022, 270,000 people, comprising about 8% of home mortgage holders, were underwater on their mortgages, owing more than their homes were worth. The 2009 global economic downturn, sparked by the mortgage crisis, saw nearly a third of the world’s homes underwater.
Films like “The Big Short” illustrated how irresponsible lending practices contributed to the crisis, with banks approving loans without proper assessment of borrowers’ ability to repay, such as offering “NINJA loans” (no income, no job, no assets) to individuals with risky financial situations.
Understanding when to make significant financial commitments, such as purchasing a home, and weighing the pros and cons of various investments, is crucial. Unfortunately, many young people lack fundamental financial knowledge, and this gap persists partly due to societal pressures and media glamorization of get-rich-quick schemes.
Thankfully, there’s a growing recognition of the importance of financial literacy, particularly for young people. Many states now require high school students to complete a personal finance course to graduate. Moreover, organizations like the Council for Economic Education advocate for policies that prioritize economic education in schools.
Increased financial literacy among the population benefits society as a whole. When individuals have a better understanding of financial principles, they are better equipped to make sound decisions, contributing to a healthier economy and a more informed electorate.
Steven Hill is the former plan chairman of the Center for Humane Technology, co-founder of FairVote, and political reform producer at New America. This article was written for The Fulcrum, which explores efforts to reform our political systems and address destructive political practices. ©2024 The Fulcrum. Distributed by Tribune Content Agency, LLC.