Some States Require Financial Literacy Classes in High School

Most Americans believe that there is a lack of personal finance education in schools. However, whether high schoolers should learn basic personal finance in high school can be a hot button issue.

This type of education seems like a logical step for students who will one day become adults, however there are those who worry about the problems that may arise, as well as parents who do not want to for their children to learn money lessons from their teachers.

Another pain point for parents is teacher preparation when it comes to teaching finance first. Many high school teachers have no knowledge about money or investing, so schools will need to find dedicated teachers to teach those subjects.

Then there is the opportunity cost that comes with teaching kids about finance over other subjects. With only so many days and hours of student teaching built into one school year, teaching students means money something one will have to give.

Finally, some worry that financial education in high schools will end up being “sponsored” by companies that have no interest in children. Just as the healthy school lunches served to children decades ago have been replaced by fast food in some states, could financial education programs be funded by corporations? credit cards one day?

Of course, most of us would hope not. However, most of us would agree that kids shouldn’t have Pizza Hut and Chick-fil-A for school lunches, but that’s what happened in school districts across the country. This has made some parents wonder what kind of protection there can be, and who will decide what financial lessons our children will learn.

California recently mandated Financial Education in High School

Despite the potential challenges, educators and policymakers in many countries still believe that the benefits of providing financial education in high school outweigh the challenges. According to the latest State Council on Economic Education Survey, more than two-thirds of schools in the states offered personal finance courses in high school as of the end of last year, in including Alabama, Georgia, Indiana, Nevada, Utah and Also.

The state of California was recently added to the list in June 2024, when Governor Gavin Newsom announced an agreement to make financial literacy a requirement for students who want to graduate from high school.

“We need to help Californians prepare for their financial future as soon as possible. Saving for the future, investing and spending wisely are lifelong skills that young adults need to learn before they start their careers, not later,” Newsom said in a press release.

The proposed California law, called AB 2927, would require a semester of personal finance education for high school students in the state in the 2027-28 school year. The course will be required to graduate from a California high school starting with the 2030-31 graduating class, the memo states.

Why Should Students Study Finance in High School?

Another big argument for financial education in high school is the fact that many children have never received financial education at home. Martin Mulyadi, Ph.D., who serves as Professor of Accounting at Shenandoah University’s School of Business, says the benefits of financial education in high school can have a profound effect on students when it comes to financial security in the future. coming. For example, teaching students to create and manage budgets, save and invest can help reduce financial mistakes in the future.

“Good decision-making skills that come from financial knowledge help students evaluate financial products and understand the long-term consequences of their financial decisions,” added Mulyadi.

Not only that, but the professor believes that schools have a responsibility to teach to prepare students for life. And of course, financial literacy is a very important life skill.

Financial advisor Matt Chancey says the community needs to think about all the things students learn in high school that apply to everyday life. When you consider this additional issue, why don’t we want to teach finance in schools?

“Every day, people deal with their bank accounts, car payments, insurance, 401k savings and retirement,” says Chancey. “Financial literacy affects every aspect of your life and almost every decision you make, so it’s probably one of the most important things about the most we should teach that we don’t.”

Finance director Vijay Marolia also points to other clear reasons why financial education for students should be a priority. Americans have $1.12 trillion in credit card debt right now, according to the Fed, and a recent survey shows nearly half of us don’t have enough money to pay off the debt. emergency fund of $1,000. A new study from the AARP revealed that 1 in 5 Americans over the age of 50 have $0 in retirement savings, and more than half of those over that age are worried that they will not have enough money to keep a job.

Marolia also pointed out that housing is expensive and homelessness is increasing, and all this is happening at a time when inflation is forcing consumers to make difficult decisions about what they can afford.

“By learning about money and personal finances at an early age, we can stop these problems before they start,” he says.

The Bottom Line

Although there are some problems that can arise as a result of teaching financial literacy in high school, there are steps that schools can take to do it in the right way.

The first is to ensure that the teachers in charge of these courses are properly trained and educated when it comes to the fundamentals of personal finance. The second is to ensure that studies are not influenced by third-party companies that promote special financial products, including credit cards and other debt instruments.

At the end of the day, it’s also up to parents to make sure their kids learn the basics of finance such as paying bills, creating a budget, and saving and investing for the future. If we don’t do that, our children are left to learn hard lessons about money and finances on their own.