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Every aspect of life is influenced in one way or another by money. Proper financial planning enables people to reach their short-term and long-term financial goals and build the life they want. However, millions of Americans mismanage their money, leading to stress, debt, and other burdens. Parents, educators, and lawmakers believe that requiring personal finance classes in high school can give kids a better chance of navigating the complex financial world.
Financial education lasts teens a lifetime
It’s quite easy to make financial mistakes that take decades to overcome. Without proper personal financial education, young people can make responsible decisions regarding saving, spending, borrowing, and taxes.
Money smarts can influence each person’s life from their early years in paying for college, starting a business, purchasing cars and homes, and planning for retirement. Other critical financial endeavors include credit cards, investments, and health insurance.
Studies show personal financial education makes a difference
Several studies reveal that students who have participated in financial education courses are more likely to be financially literate and demonstrate improved financial behaviors. Financial education courses for teens should focus on financial decisions they will likely be making in the next few years, such as student loans, car loans, credit cards, and similar topics.
As with most education courses, the quality of the teacher makes a real difference in how much knowledge each student absorbs.
Some states already require personal finance classes
A handful of states have enacted laws that require high school students to complete a personal financial education course as a requirement of graduation. Utah, Missouri, Alabama, Tennessee, and Virginia lead the way in state-mandated financial education.
However, the majority of states either don’t require students to take a finance class, but instead either offer it as an elective or don’t include such a class in their curriculum.