As a child growing up in a Latino community in East Palo Alto, California, the only thing we knew about money was that it's always hard to be low-income, said Karina Macias, 26. One lesson her parents tried to teach her is that it is best to pay a revolving balance on your credit card and never keep it in full, she recalled- that was what I learned from my parents. When Macias reached high school, she took a personal finance class and was taught a better way to manage high-interest debt. I 'm now very responsible as an adult, said she. If you are anything like myself, we have a lot of time to remember. More from Invest in You: Americans are more in debt than ever before.
This critical link could help bridge America's racial wealth gap by reducing inequality.
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Start with$ 1.7 million Tim Ranzetta has taught personal finance classes to kids across the country and among all income groups. The lack of knowledge is staggering, he said; and yet, money is still a taboo topic, said Ranzetta, CEO and co-founder of Next Gen Personal Finance, a nonprofit focused on providing financial education to middle and high school students. But in 2021, the stakes are too high, he said; Coming out of the pandemic, there is the realization that a lot of people are being left behind, Ranzetta said. This education is necessary. When Preenon Huq was in high school, his personal finance teacher covered some economics in class. A lesson on compound interest stood out, he said: I wanted to buy a car and my teacher told us about putting$ 200 away at age 18 and how it could grow to a million dollars- that was a lightbulb moment. As the son of immigrant parents, Huq, now 24 said they did n't talk about money at home and his parents never splurged.
Huq began to save diligently so he could afford a car himself. At 19, he opened a Roth individual retirement account and maxed out the contributions. What's your opinion on this, and why?
Later, when he became an accountant, he maxed out his employer-sponsored 401 plan. He now has roughly$ 100,000 saved between his two accounts for retirement. Huq also has two side jobs to earn extra spending money, including a part-time job at Best Buy and as a wedding DJ in the summer months. He bought this car- a used Toyota 4 runner from 2005- and then, last year, a Mazda Miata from 1993. In October he bought his parents' home in Plymouth, Minnesota. Many studies show that there is a strong correlation between financial literacy and financial well-being. Students who are expected to take private finance courses starting from a young age are less likely to get lower-cost loans and grants when it comes to college and more likely to rely on high-interest credit cards or private loans, according to a study by Christiana Stoddard and Carly Urban for the National Endowment for Financial Education. Can you explain your story to the world? Our results show that the key student financial education requirement could significantly impact high school financial behavior, the authors said in the report.