More and more students are receiving personal finance education. But is it enough?

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One in four high school students has to take a course on personal finance.


Important points

  • Almost a quarter (22.7%) of high school students today must take a personal finance course to graduate.
  • Legislators in 26 states are introducing 60 separate bills to expand access to personal finance education.
  • People who are more financially literate are less likely to experience financial difficulties.

According to the S&P Global Financial Literacy Survey, 43% of Americans are financially illiterate — and gaps in financial literacy can lead to chronic money problems. In 2018, only 16.4% of US graduating high school students received a personal finance education. In the meantime, the number has risen to about every fourth high school student (22.7%).

As more states mandate financial literacy as part of the high school curriculum, Next Gen Personal Finance estimates that at least one-third (35.1%) of high school students have taken a standalone personal finance course. That still leaves two out of three high school students without the education they need to be financially capable.

More and more states are implementing personal finance requirements

Currently, only eight states require high school students to take a personal finance course: Alabama, Iowa, Mississippi, Missouri, North Carolina, Tennessee, Utah and Virginia.

Five more states are beginning to implement personal finance education at the high school level. Personal Finance Education is defined as a self-contained Personal Finance course lasting at least one semester or 60 consecutive hours of instruction.

Michigan recently passed legislation that would make it the 14th state to guarantee high school students a personal finance course before they graduate. Momentum has increased this year as 26 state legislatures introduced 60 separate bills to expand access to personal finance education.

The Importance of Personal Financial Education

Personal Finance Education helps people directly with their financial well-being. People with higher financial literacy are less likely to experience financial difficulties. People with low financial literacy are:

  • Six times more likely to have trouble making ends meet.
  • Five times more likely to not be able to cover living expenses for a month.
  • They are four times more likely to spend more than 10 hours a week thinking about or dealing with personal financial problems.
  • They are four times more likely to be dissatisfied with their current financial situation.

Studies also show that personal financial literacy reduces the likelihood of young adults taking advantage of payday loans and is positively correlated with wealth accumulation and net worth by age 25. States with mandatory personal finance courses saw lower delinquency rates and better credit scores.

Next Gen Personal Finance’s annual report found that access to personal finance education is still divided by location, race and socioeconomic status. Students across the country do not have equal access to personal finance education. Extending personal finance education to all segments of society can help bridge the socioeconomic gap and help more people build their savings accounts.

The vast majority of millionaires have not inherited their money or made a six-figure income. Financial success is often based on applying basic personal finance principles like investing regularly and consistently over a long period of time, being debt-free, and sticking to a budget. Financial literacy is key to financial success and can help build good habits for the future.

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