Teaching Financial Literacy in Our Schools
Only Half of US States Make Taking a Personal Finance Class Mandatory, but It’s Getting Better
n the entire field of personal finance, one of the biggest issues we have is financial illiteracy. So many people know so little about money. This is a big reason why we keep making big financial mistakes. One of the best ways to overcome financial illiteracy is to teach it in schools. Get our children to learn about money so that by the time they become independent as adults, they know what they're doing. Unfortunately, only 23 states in this country require that high school students take a personal finance class. We've got two that have just joined those ranks, Nebraska and New Mexico. That makes the total 23. Still less than half. Florida's got an elective. They just made it mandatory. Montana State University did a study. They found that students who took a personal finance education class were less likely to default on loans as adults. They've also got higher credit scores.
Another study by the University of Wisconsin found that personal finance classes significantly reduce the likelihood that students would end up with high interest payday loans. There is no question that education improves behavior. People make bad financial decisions because they don't know any better. Because still in America, money is the one taboo topic around the dinner table. You'll talk with your kids about just about everything - politics, religion, drugs, sex. But you won't talk with them about money. We need to start teaching our children about money at incredibly young ages. This is why Jean and I wrote a children's book on money called The Squirrel Manifesto aimed for 4 to 8 year old’s. It's never too early to start talking with your kids about money. It's never too important for your school system to be teaching students about money as well. Talk to your local school board and see what they're doing about improving financial literacy. Do it as though the future of our nation depended on it.