Strategy discussions with two financial experts reveal the dissatisfaction with the traditional one-job, one-career approach
In an economy where financial security is a top priority for many, a multi-income approach is increasingly being recognised as a key strategy for achieving long-term financial stability. This shift in mindset, however, begins with effective financial education in schools.
A recent study reveals that the average starting salary for college graduates is just north of $68,600, which falls significantly short of the financial security goal of nearly 1 in 4 U.S. adults (26 percent). Recognising this gap, a multi-income approach, which involves diversifying income sources, is gaining traction.
One notable proponent of this approach is Joy, who stresses the importance of good money management skills, even among high earners. She suggests starting small and remaining flexible when layering activities into a work routine to add income.
The traditional financial advice revolves around four core points: getting a college degree, getting a job, borrowing little, and saving more. However, the burgeoning growth of side-hustling in America suggests that multiple incomes are beneficial in today's economy.
To integrate this concept effectively into the educational system, several key strategies are proposed:
1. Diverse Income Streams: Teach students about various income sources, such as entrepreneurship, investments, and part-time jobs, to help them understand the concept of multiple income streams.
2. Standardized Curriculum Framework: Establish a standardized national framework for financial literacy that includes multi-income concepts. Implement curriculum structures that are tailored to different age groups, gradually increasing complexity as students mature.
3. Hands-On Learning Experiences: Incorporate gamified learning tools and technology-based platforms to make financial education engaging and interactive. Introduce students to simulated investment accounts where they can practice managing virtual portfolios.
4. Teacher Training and Resources: Provide teachers with comprehensive training and resources to effectively teach financial literacy. Partner with financial institutions to offer real-world insights and resources.
5. Real-World Applications and Values: Teach students how financial success can contribute to positive community impacts, such as philanthropy and family business legacies. Encourage discussions on how money relates to values, responsibilities, and social impact.
6. Assessment and Feedback: Regularly assess students' understanding of financial concepts and adjust the curriculum accordingly. Establish feedback loops to ensure that students receive constructive feedback on their financial decisions in simulations or real-world scenarios.
By implementing these strategies, schools can effectively teach financial literacy and promote a multi-income approach, preparing students for a financially savvy future. It's important to note that learning good money habits with the money one currently earns is crucial before adopting a multi-income approach.
Only 28 states currently mandate personal finance education for high school students, indicating a need for wider implementation of these strategies. With the potential benefits, such as less debt, more savings, and faster wealth accumulation, it's clear that revamping financial education in schools is a step in the right direction.
[1] Reference for age-based learning: https://www.councilfortheeconomieducation.org/wp-content/uploads/2019/03/CEE-Financial-Education-Framework-for-Young-People-2019-03-27.pdf [2] Reference for investment simulations and values-based discussions: https://www.councilfortheeconomieducation.org/wp-content/uploads/2019/03/CEE-Financial-Education-Framework-for-Young-People-2019-03-27.pdf [4] Reference for community partnerships: https://www.councilfortheeconomieducation.org/wp-content/uploads/2019/03/CEE-Financial-Education-Framework-for-Young-People-2019-03-27.pdf
- To supplement the traditional financial advice, personal finance education in schools should incorporate lessons on entrepreneurship, business, and investment as means to generate multiple income streams, following Joy's recommendation for career development and self-development.
- To create a comprehensive financial education curriculum, educators could reference standardized frameworks such as the Council for Economic Education's Financial Education Framework for Young People (2019) to teach finance, career development, and education-and-self-development, focusing on the long-term financial stability of students.
- To promote a multi-income approach, teachers should be equipped with training and resources to effectively teach diversified income streams, as well as tools like gamified learning, technology-based platforms, and real-world experiences for hands-on learning, encouraging students to make informed decisions and accumulate wealth efficiently.
