As high school students head back to the classroom this year, a growing number of them might have a class schedule that includes reading, writing and … retirement planning.
More and more states are introducing and enacting legislation requiring high schoolers to complete a standalone personal finance class. These classes help ensure students know the basics of managing their money before moving on to college or the workforce. They learn about topics ranging from opening a bank account and budgeting to managing debt — all to prepare them for financial success and avoid costly mistakes that can have lifelong financial consequences.
A strong foundation
“Financial well-being is not just about wealth creation for those who have a lot of commas in their salary, it’s about giving everyone the fundamental skills to be able to make good financial decisions,” says Angela Harrell, chief diversity and corporate impact officer at New York-based Voya Financial. “High school is when financial decisions start to happen, from working and driving to thinking about student loans, so that’s when it’s important to give them hands-on knowledge and ways to think about real-world scenarios.”
Voya Financial partners with organizations to promote financial literacy among high schoolers across the nation. These efforts include supporting the Council for Economic Education’s National Personal Finance Challenge, a competition for high schoolers, and Working in Support of Education, which releases an annual ranking of the best high schools teaching personal finance. “Our research shows that this education makes a meaningful difference in people’s lives,” Harrell says.
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Outcomes from these types of programs include improved financial behaviors such as smarter college payment decisions (such as maximizing lower-interest federal loans before seeking more expensive private options), better budgeting and increased investing for retirement, says Yanely Espinal, director of educational outreach for Next Gen Personal Finance (NGPF), a nonprofit that offers curriculum, resources and professional development to promote the teaching of financial skills to students across the country.
As a result, Espinal says, momentum is growing around financial education legislation. According to NGPF’s 2022 State of Financial Education Report, roughly 23 percent of high school students in the U.S. had access to guaranteed financial literacy education in 2022 — up from 16 percent in 2018. In 2018, just five states guaranteed standalone personal finance classes for all high school students.
By May 2022, 13 states had guaranteed, or committed to guaranteeing, these classes for students before they graduate. And that number is expected to climb.
“This movement is now getting headlines and media attention, which has even more people wanting to get involved in the momentum,” Espinal says.
Advocacy and accessibility
But while the efforts are gaining traction, barriers to financial literacy still exist, from a lack of generational knowledge to mistrust in financial institutions and short-term thinking around money and finances. Experts agree the best way to get more students access to financial literacy programs is for their parents to advocate for these classes both in schools and with local legislators.
“Ask your student’s administrator, principal or teacher: ‘Will my child get access to a full semester class of personal finance?’” Espinal suggests. She notes that many schools might say they have the material in the curriculum because it’s included in an economics or business class. But when it’s embedded in another course it’s not as effective. “It needs that full semester of instructional time to go through all the important topics,” she says.
While there may be concerns that some schools can’t afford to put these educational programs in place, many organizations offer curriculum and resources at no cost to the school.
Espinal also emphasizes that teachers need not be experts in finance or business to teach it.
“It’s not just math teachers; art teachers are teaching this,” she says. “Once you find someone willing to teach it, you can bring anybody up to speed with the materials, and everything you need to make the course a success is online, including lesson plans, assessments and answer keys.”
That has been the experience of Jennifer Jordan, a business and media communications teacher at Madeira High School in Cincinnati, who has been teaching a dedicated semester of personal finance to her students since 2014.
Jordan says teaching personal finance is one of the most rewarding things she’s ever done. Through the course of the semester, her students create a financial diary and budget, track their expenses and look at spending patterns for a month.
“It’s hard to talk to a kid about insurance, but if you can focus on helping them think about their future selves, they really get engaged,” she says. “It’s a blessing in disguise for so many students because it helps them go into the world with their eyes wide open.”