Five days before my high school graduation, all the seniors filed into the school auditorium for a special financial literacy presentation. For two hours, a teacher spoke to us about topics such as credit score, debt, and taxes, among others.
While I found the presentation useful, I left the auditorium that day feeling as if I gained just a surface-level knowledge of the vast ocean of financial literacy. The PowerPoint covered a healthy variety of topics, but the teacher spent no more than 20 minutes on any one subject. Furthermore, throughout the lecture, the teacher continually emphasized just how crucial knowing these topics would be for our entire lives.
Why then, I thought, were we just learning about this now? If personal finance is such a critical area to master, why was the conversation just beginning as we prepared to enter a world in which we’d need it? With four years to talk about it, why were we made to wait until the final two hours?
Unfortunately, I am far from the only person who has wondered this. Right now, only 25 states require an explicit personal finance course as a necessary credit for graduating high school. In 2023, only 40.5% of high schoolers were “guaranteed” to take a financial literacy course. While this number has risen significantly from 22.7% in 2022, it still represents less than half of the target population. Schools are doing an immense disservice to their students by not providing adequate training in financial literacy, a topic vital for adolescents to be conscious of as they prepare to embark on their post-secondary careers. Every state should mandate that financial education be integrated into a school’s core curriculum to set students up for success.
First, financial proficiency becomes a necessity immediately after high school, as students are faced with the potentially life-altering decision of selecting a college or opting to pursue endeavors such as trade school, a gap year, or full-time employment. Students considering higher education must weigh the benefits and drawbacks of possibly taking out loans and going into debt. One report estimates that the average public university student borrows over $32,000 to earn their bachelor’s degree.
Meanwhile, students not attending college, or doing so part-time, are still faced with important decisions such as finding a job and budgeting that money for necessities like food and a place to live, while also saving enough for retirement and emergency funds.
Despite needing this education for a smooth transition to adult life, a 2016 survey concludes that only 31% of Americans ages 18-26 believe their high schools taught them effective financial habits and strategies. Schools are failing their children by not giving them a strong foundation to navigate the tricky decisions they will be making almost as soon as they become adults.
Second, kids simply do not receive sufficient financial education from their parents. One survey indicates that 83% of U.S. adults believe parents are the most responsible for instilling financial literacy in their children. Yet, a different survey reports that 69% of parents in the United States “have some reluctance about discussing financial matters with their kids,” while only 23% of the kids surveyed claim to speak with their parents frequently about money. Most Americans believe it is the role of the parent to promote healthy financial habits in their children. However, parents are clearly not fulfilling this role. Regardless of whether they are too preoccupied, too indolent, or perhaps lack essential financial literacy themselves, it is evident that the majority of parents do not instill the needed fiscal skills in the next generation. Thus, it hinges on schools to provide their students with the knowledge and skills that they are not receiving at home, even if most people think the skills should start at home.
Third, for a country that has become so concerned with equity, the United States is hypocritical to not compel schools to provide instruction on personal finance, which ensures that every child is equipped with roughly the same level of understanding necessary to live a comfortable life. Without proper financial literacy education in schools, its primary source will be from parents or the internet, where jargon and unrealistic strategies may intimidate students away from in-depth financial education altogether. As argued previously, parents should not have to be these educators, especially as many of them become cagey, often understandably, when it comes to finances.
But furthermore, suppose schools taught no financial literacy whatsoever and the role of financial educator shifted completely to parents. Then, we would see rampant inequality. The kids who are going to receive a strong foundation and become capable of effectively managing their own finances are those whose parents have a firm grasp of complex financial topics, and those parents are going to come from overwhelmingly privileged backgrounds. Meanwhile, children from disadvantaged homes with parents who are not as financially literate or may be working too much to meaningfully teach financial skills will only learn the little information that their parents can give them, which is surely less than what the first group would receive.
Hence, if it were left completely to parents to teach financial literacy, children from disadvantaged backgrounds would be faced with yet another setback as they attempted to accumulate wealth. One report suggests that Americans collectively lost over $436 billion in 2022 due to financial illiteracy. Therefore, schools must provide students with equal access to financial education to ensure every child has an abundant arsenal of knowledge to attack the world.
Some people might argue that in such a short school day that must be filled with other core requirements like math, language, and science, there is little time for financial literacy classes.
However, financial literacy deserves to be its own core subject. The lessons and skills gained from high-quality financial education are directly applicable to life and can even augment skills obtained in other classes. At the very least, it can be incorporated into schools’ core math curriculums, as many topics in finance involve some degree of computation. One program, called FiCycle, offers a “finance-infused high school math curriculum,” that can both supplement and substitute existing practices. Though it is currently only being used in 70 schools, the results suggest that students both learn financial literacy more clearly through math and math more clearly through financial literacy. But regardless of whether it is lumped in with math or offered as a standalone course, financial literacy should be treated as just as a high of a priority as English and social studies.
Other opponents argue that asking the schools to teach financial literacy is just another burden on an ever-growing list of problems society expects schools to solve. One article consulted says that schools are already "de facto counseling centers, welfare distribution hubs, and soup kitchens," among other things. Some would argue that it is not necessary to throw all of society's problems on the schools.
However, by implementing a strong financial literacy course, these schools can indirectly decrease the need for these other services they provide. With a better grasp over how to handle, save, and invest money, some people may escape the poverty that requires them to use these other services that schools provide. Over the course of several years, this can lead to less need for schools to act as welfare distribution hubs and soup kitchens. In essence, financial literacy courses can lighten the burdens on schools to tackle these other issues.
Ultimately, compulsory financial literacy education in schools stands to benefit all students and their families with a proper skillset to navigate the challenging and volatile financial world in which we live. It would behoove every state to strongly consider imposing mandates that require schools to provide this service, whether through programs like FiCycle, a full course dedicated to personal finance, or some other method to ensure that children are not left in the dark on a topic so important for the rest of their lives.
Excellent article Braedon. I have wondered the same thing myself!