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The Importance of Financial Literacy for High School Students

Any adult who’s managed bank accounts for years may not realize that for the average high school student, finance can be mystifying. Many young people don’t even understand the basics. In fact, a recent report from FINRA (the Financial Industry Regulatory Authority) showed that while financial literacy among all Americans has dropped over the past decade, the steepest drop is among young people.

As a result, some states have begun requiring financial literacy classes for all high school students, but most still do not. As high school students prepare for the next stage of their lives – whether that’s college or entering the workforce – many are doing so without the benefit of fully understanding their finances.

That’s one of the reasons Commerce Bank is active in helping students of all ages improve their financial literacy. Whether it’s volunteering to speak on the topic at Junior Achievement or visiting high schools at the request of teachers, the people of Commerce help whenever they can.

Adam Steven, executive vice president and regional retail banking director at Commerce Bank, believes in the importance of helping students. He has often led financial literacy classes in Kansas City, where he is based.

“When we think about serving our communities, part of our responsibility is to help wherever we can,” Steven says. “That’s especially true for students who haven’t had enough life experience yet to understand the basic financial requirements they’ll have as an adult. Being able to offer them help isn’t just a good thing; it’s our responsibility.”

In St. Louis, Commerce associates volunteer with Junior Achievement on full-day sessions, for which students from school districts throughout the region are brought to a unique facility that includes a model bank. For many of these students, it’s their first opportunity to learn about the banking system.

“It’s really a great experience for the students,” says Loura Gilbert, vice president of community development at Commerce. She helps coordinate the bank’s financial literacy volunteerism in St. Louis. “JA makes it entertaining, and the students really learn a lot. Our volunteers play an important role, helping to lead the training, answer questions and chaperone the kids.”

Gilbert also notes that schools will sometimes reach out to their local Commerce Bank branch whenever a teacher wants to bring in a personal finance thought leader. Fortunately, our bankers are eager to help. “Being ‘on call’ like that is important to us,” she says. “We work on tutorials that we can have at the ready to help students with the basics.”

As Commerce executive vice president and retail market director Darryl Collins explains, in many cases the students benefit from these educational efforts because their parents often don’t talk to them about finances. “Students realize that the things they want – like a car or a new phone – cost money,” he says. “What they usually don’t realize is that these things come with ancillary costs, like insurance, repairs and monthly service fees. We help kids understand that you have to budget for these things as well.”

Collins adds that budgeting is one of the most important elements of financial literacy to impart upon high school students. Part of what Commerce volunteers share with students is how to set up a budget and account for monthly and annual expenses as well as their disposable income.

It’s also helpful to show high school students the benefits of putting money in an account. “A common mistake young people make is that they usually carry their cash around,” says Gilbert. “That results in a lot of impulse buying. Because they aren’t able to track what they spend their money on, before they know it, their money is gone, and they don’t know where it went.”

Becoming more familiar and comfortable with banking services and solutions has other benefits for students as well. “We’ve seen a lot of research that shows students who have a savings account are four times more likely to go to college,” Gilbert notes. “It’s quite a correlation, and one of the reasons why we try to do what we can to help kids be smarter about their finances. It’s important.”

Shawna Wright, director of talent management, coordinates some of the bank’s volunteer efforts around financial literacy in Kansas City, and she agrees that understanding finance helps the students of today become better consumers tomorrow.

“What I love about our work with JA is that it reaches a lot of kids who don’t yet know what’s possible,” Wright says. “Exposing them to financial education really opens their eyes. It allows them to dream about what they can accomplish. Part of our responsibility is to show them what they can do.”

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