Photo (cc) by stevendepolo
Teaching high school students about paying bills, budgeting and money management helps lay the foundation for a healthy financial future. Unfortunately, most American states are falling short in teaching teens the ABCs of personal finance.
According to a new financial literacy study from Champlain College’s Center for Financial Literacy, just five states in the country earned an A based on their efforts to produce money-savvy high school graduates.
The majority of states received Bs (20 states) and Cs (11 states), but an alarming number of states earned failing grades of D (3 states) or F (11 states and the District of Columbia), indicating they have minimal or no requirements for teaching financial literacy to high school students.
It’s an especially troubling trend when you consider the number of students who take on student loans to fund their college education.
The report said:
We know that financial literacy is linked to positive outcomes like wealth accumulation, stock market participation and retirement planning, and to avoiding high-cost alternative financial services like payday lending and auto title loans. Conversely, financial illiteracy in part led to the Great Recession. To minimize the impact of any future financial crisis, Americans must be educated in personal finance. A great place to start is with our students. In too many of our states, our youth receive little, if any, personal finance training in elementary school, middle school, high school and college.
High school students in Alabama, Missouri, Tennessee and Virginia receive a minimum of one semester of personal finance education, which earned the states an A on the financial literacy report card. Utah, where general financial literacy is a funded mandate, earned the report’s only A+.
“Utah requires that all high school students take a half-year course exclusively dedicated to personal finance topics, and students are required to take an end-of-course assessment examination created and administered by the state,” the report said.
“Really nobody else is even close to Utah,” said John Pelletier, the director of the center, located in Vermont, and the report’s author. “It’s a big deal what they’re doing.”
The study looked at states’ graduation requirements, academic standards and how personal finance courses are delivered to students.
My home state of Montana earned a D. When I was a senior in high school, I took “Prep for Life,” which provided a very basic education in money matters, including making, prioritizing and following a budget, balancing a checkbook (it was the 90s) and paying bills.
But the class was an elective, not a requirement. In fact, the only reason I enrolled in the class was because my parents persuaded (forced) me to take it.
Check out “6 Lessons That Turn Kids Into Money-Savvy Adults.”
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