Ben Sax – Mustangs Ahead
(LAKEWOOD RANCH, FL)- April is Financial Literacy Month, which recognizes the skills that allow an individual to make informed and effective decisions with their financial resources.
LRHS economics teacher Vito Bavaro said that the most important thing students need to know about financial literacy is how to create and live on a budget. Since economics class is required to graduate in Florida, all students will be equipped with this knowledge.
How do students manage a budget?
Bavaro explained, “We teach them to pay themselves first and then break down every paycheck so that they know exactly where their money is going.”
Another thing most students don’t understand is how interest works.
Bavaro said, “Interest compounds and the rule of 72 hopes to double money every six years.”
The Rule of 72 is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself.
Bavaro says the best way students can save money is by having a plan for their money and to take 15% of every paycheck and put that towards an interest-earning savings account.
Overall, it is the goal of all of the LRHS economics teachers to prepare the students for the future by making them financially literate.