More Students Are Getting Personal Finance Education. But Is It Enough?

A teacher speaking with a table of students in the lunch room at a school.

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One out of four high school students are required to take a personal finance course.

Key points

  • Nearly a quarter (22.7%) of high school students today are required to take a personal finance course to graduate.
  • Legislatures in 26 states are introducing 60 different bills to expand access to personal finance instruction.
  • People with higher financial literacy are less likely to face financial difficulties.

According to the S&P Global Financial Literacy Survey, 43% of Americans are not financially literate — and gaps in financial knowledge can lead to chronic money issues. In 2018, only 16.4% of U.S. high school students who graduated received a personal finance education. The number has now increased to about one in four high school students (22.7%).

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

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 standalone personal finance course that is at least one semester, or 60 consecutive instructional hours.

Michigan recently passed a bill that would make it the 14th state to guarantee high school students a personal finance class before they graduate. Momentum has increased this year, with 26 state legislatures introducing 60 different bills to expand access to personal finance instruction.

The importance of personal financial education

Personal finance education directly helps people with their financial well-being. Those with higher financial literacy are less likely to face financial difficulties. Those with low financial literacy are:

  • Six times more likely to have difficulty making ends meet.
  • Five times more likely to be unable to cover one month of living expenses.
  • Four times more likely to spend 10+ hours per week thinking about or dealing with personal finance issues.
  • Four times more likely to be dissatisfied with their current financial situation.

Studies also show that personal financial education reduces the likelihood of young adults using payday loans, and is positively correlated with asset accumulation and net worth at age 25. States with mandated personal finance courses saw reduced delinquency rates and better credit scores.

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

The vast majority of millionaires didn’t inherit their money or make a six-figure income. Financial success is often based on using basic personal finance principles such as regular and consistent investing over a long period of time, staying out of debt, and sticking to a budget. Financial education is the key to financial success and can help build good habits for the future.

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