Using finance to guide education and career decisions

What is it about?

Developing skills that are valued in the labor market is complicated and among the most meaningful financial investments of a lifetime. For example, is it better to attend college and take on loans or attend a trade school and graduate with a lower earning potential but no debt? Unfortunately, adolescents often make this critical decision with limited guidance, knowledge, or planning. Deciding how to invest in skill development is an adult decision with adult consequences. Yet, young Americans typically make the largest investment decision of their lives with little relevant experience and with an immature brain. While young Americans typically enjoy many good options to develop their skills, they also have limited support in making an informed decision given their unique situation. We provide a summary of research findings by outlining ten barriers that adolescents often face when structuring their decision about how to select a viable career path. We suggest three distinct opportunities to address these barriers by first framing the conversation, then using a key finance metric, and finally focusing on the key elements to avoid overload. This research is most useful for individuals that support the decision process of adolescents investing in their skill development.

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Why is it important?

We include financial returns to help move beyond the guidance of "just go to college". While this is generally good advice, being more selective about how to invest in an education and career pathway can yield great benefits.

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