Personal finance courses may become mandatory in high school

State legislatures are considering mandating personal finance courses in high school to help students become more financially literate before they graduate.

More states are requiring high school students to take a financial education class as a prerequisite ... [+] to graduation.getty
As more states require high school students to take a financial education class before they can graduate, students will be better prepared to manage their money and make sound financial decisions when they enter the real world. This will lead to a more financially responsible and stable society, and help to alleviate some of the financial stress that many people experience.

A high school course in such demand that students are willing to sit on the floor and audit the class without earning credit? It's hard to believe, but it's true: a high school course in such demand that students are willing to sit on the floor and audit the class without earning credit.

I strongly believe that financial literacy should be taught in all high schools across the state of New York. Anisha Singhal, a senior at Stuyvesant High School, is advocating for this change and I think she is absolutely right. Financial literacy is something that every kid needs to know how to do, and yet we are often left to fend for ourselves when it comes to learning about personal finance. I believe that a personal finance elective like the one offered at Stuyvesant High School is a great way to give students the financial literacy education they need. I also think that it should be mandatory for all high schools in New York to offer this type of course. With the right guidance, our kids can learn how to manage their money wisely and make sound financial decisions that will benefit them for years to come.

As someone who is passionate about financial literacy, I believe that it is imperative that high school students receive a stand-alone personal finance course. I am encouraged by the fact that the state legislature has introduced numerous bills seeking to require financial literacy courses in high school, and I hope that one of these bills will pass in the near future. I believe that financial literacy is a vital life skill that all high school students should have, and I will continue to advocate for its inclusion in high school curriculums.

Financial education is gaining momentum at the state level.

There is reason to be optimistic about the potential passage of the New York bill in 2023 given the growing momentum at the state level for personal finance requirements in high schools. In April, Georgia enacted a law requiring high school students to take a half-credit financial literacy course as a high school graduation requirement. Florida, Michigan, Nebraska, Ohio, and Rhode Island have all passed laws recently too. Other states, including South Carolina, Minnesota and New Hampshire have similar legislation making its way through legislatures. Overall, 12 states require or will soon require a stand-alone financial literacy course as a prerequisite to graduation. Additionally, 25 states mandate the inclusion of some financial literacy training in the curriculum, including as a unit within an existing class like math or economics. This is good news for the future of our country's financial stability. It is important for young people to understand personal finance so that they can make sound decisions about money as they enter adulthood. With more states mandating financial literacy courses, we are moving in the right direction.

The need for financial literacy among young people has never been greater, according to Annamaria Lusardi, founder and academic director of the Global Financial Literacy Excellence Center at George Washington University. With many high school students preparing to enter the "real world" without a basic understanding of personal finance, the recent financial shocks of the pandemic have illuminated the need for financial education. "We owe it to this young generation to be well prepared for the future," Lusardi said.

Low Levels of Financial Literacy Among Americans

It is disheartening to see that, despite numerous studies highlighting the importance of financial literacy, Americans continue to score poorly on measures of financial sophistication. The results of the 2022 financial literacy survey show little improvement from previous years, with U.S. adults averaging only 50% correct answers. This lack of financial knowledge is particularly concerning for young people, who are just starting out in their working lives. It is essential that we do more to promote financial literacy in America, so that our citizens can make informed decisions about their money.

High school students, like most Americans overall, display a strikingly low level of financial ... [+] literacySource: TIAA Institute-GFLEC Personal Finance Index 2021-2022
It is concerning that high school students display such low levels of financial literacy. This lack of knowledge could lead to major financial problems down the road. It is important for young people to learn about personal finance so that they can make sound financial decisions throughout their lives.

As more and more high school students embark on their college education, they are increasingly faced with the burden of student loan debt. According to Champlain College's Center for Financial Literacy, two-thirds of students who graduated with a bachelor's degree in 2020 did so with debt, compared to less than half in 1993. Most students enter college without a full understanding of the financial implications of their decisions, including the amount of debt they can reasonably take on, the connection between their chosen field of study and their expected income level upon graduation, and the impact of inflation and credit scores on their budgeting and loan repayment. This lack of financial literacy can have serious implications for students' long-term financial stability, and it is important for colleges and universities to do more to educate their students about these issues.

The findings of the AIG Retirement Services and EVERFI survey are concerning, to say the least. It's clear that college students are increasingly relying on credit cards to make ends meet, and this is having a negative impact on their financial wellbeing. With 40% of students carrying more than $1,000 in credit card debt, and 38% of students not planning to pay off their bill in full each month, it's clear that something needs to be done to address this issue. It's time for colleges and universities to do more to educate their students about financial literacy and the dangers of credit card debt. It's also time for lawmakers to take a close look at the issue and see if there are any policy changes that can be made to help alleviate the burden of credit card debt on college students.

The Consequences of Making Early Financial Mistakes

As young adults enter college and begin to establish their independence, it is important to be mindful of the long-term financial consequences of their actions. Making careless decisions with credit cards or other loans could lead to years of difficulty securing loans, renting an apartment, or even finding employment. In some cases, it could also mean paying tens of thousands of dollars in additional interest charges. As Robert Manning, the author of Credit Card Nation, sums up, "While freshman and their parents are likely thinking more about tests and academics during orientation, the fact is that after graduation a student's credit rating is arguably far more important to his or her future than grade point averages." By being mindful of the potential consequences of their actions, young adults can help set themselves up for a bright financial future.

Why Some Financial Literacy Bills Have Stalled

I believe that financial literacy is an important skill that all students should have. I think that legislation around financial literacy has stalled in some states because of a deference to local district rights, the perceived opportunity cost of offering personal finance electives, and the potential difficulty in finding qualified instructor to teach the classes. I think that these are all valid concerns, but I believe that financial literacy is a skill that all students should have. I think that states should find a way to offer financial literacy classes without compromising other elective choices or career-training electives.

States Need to Focus on Curriculum

As more and more states move towards codifying financial literacy courses into their high school curriculums, it is important to focus on both the pedagogy and the curriculum. The examples used should be tailored to resonate with the experience of high school students, and to be relevant to their lives. For instance, at Stuyvestant High School, seniors review the financial aid packages of their college acceptances, helping to personalize the experience for students. By focusing on real-life examples, we can help ensure that these financial literacy courses are truly effective in preparing students for the future.

As more and more states begin to require financial literacy courses in their high school curriculum, it is important that the content of these courses is up-to-date and relevant to the lives of today's students. Unfortunately, some states' programming may be too antiquated and specific, with lessons on topics like "balancing a checkbook" and "receiving an inheritance" that could strike many students as potentially anachronistic and exclusionary. More importantly, many state curricula don't touch on how to evaluate financial advice, including what high schoolers are bound to hear on social media sites like TikTok. Course content needs to be more forward-thinking and include discussion of new financial tools like payment and trading apps and digital money, because students are already hearing about them. According to Tim Ranzetta, co-founder of Next Gen Personal Finance, "You better be talking about cryptocurrency." By ensuring that financial literacy courses are inclusive and up-to-date, we can give today's students the tools they need to make sound financial decisions in the future.