More than 51 percent of young adults across the United States say that a high school money management class would have benefitted their lives, according to a study from the National Financial Educators Council.
While 45 states include personal finance in state standards, only 17 states require high school students to take a personal finance course, according to the 2016 Survey of the States from the Council for Economic Education.
An emphasis on state testing in math and English language arts in recent years crowded out many other subjects, including financial literacy, says Susan Sharkey, senior director of the National Financial Educators Council’s high school program.
“We can’t expect a young person to magically know how to manage their funds, read a lease, talk to an insurance agent or compare prices on loans when they turn 21” Sharkey says. “We need to help them build the skills that will impact their lives and the entire economy.”
Start early
Financial education should start as early as pre-K, with lessons on decision-making, trading toys, and consequences, Sharkey says. Core topics such as spending, borrowing, investing, protecting assets and building earning capacity can be worked into any curricular area, she adds.
For example, when fourth-graders learn about multiplication with decimals in math class, it can also become a new lesson on compound interest.
No accepted certification to teach elementary-level financial education exists, so teachers from different subjects are often tasked with providing instruction—often with little training, Sharkey says. Fewer than 20 percent of teachers reported feeling competent teaching personal finance topics, according to a University of Wisconsin-Madison study.
“There is often some confusion over what someone should be teaching in a financial literacy class” says Christopher Caltabiano, chief program officer of the Council for Economic Education. “A good financial literacy course talks about how to make informed decisions, and how you gain the information you need to make the decision that’s best for you at that point in your life.”
Strong programs also focus on real-world issues students can relate to: Instead of having students create a retirement plan, they should be asked to think about saving for a car.
Superintendents should provide leadership in setting requirements for financial literacy and finding ways to integrate money management skills into the curriculum, Sharkey says.
“Administrators are key in setting the tone for the importance and relevance of financial education” she says.
Four factors for strong financial education
The National Financial Educators Council suggests key aspects of effective financial classes:
A well-trained educator: Teachers can find training resources through local colleges, workshops or free programs offered through nonprofits such as the Jump$tart Coalition for Personal Finance Literacy.
Quality program materials: Classroom activities, topics and assignments should be created with field experts and targeted to the proper age group.
Timely and relevant subject matter: Instruction topics and goals should link to real-world decisions that impact the students’ lives.
Evaluation: Well-designed evaluations help educators see student improvement and change programs as needed.
