South Carolina is becoming the latest state to require high school students to take a standalone personal financial literacy class to graduate, joining a roster of five other states (Iowa, Nebraska, Ohio, and Florida) that are doing the same. Currently, only seven states require high school students to take a standalone personal financial literacy class to graduate: Utah, Missouri, Mississippi, Alabama, Tennessee, North Carolina, and Virginia. Fortunately, other state legislatures are poised to vote on requiring their own personal financial literacy classes for high school graduation, including Michigan and Minnesota.
Support for Financial Education is Growing Fast
States have been implementing personal financial literacy requirements at the high school level to help ensure graduates have real-world knowledge and skills. In a nation that seems increasingly politically polarized, having teens learn about personal finance is a rare topic that receives bipartisan support. Virtually all states have laws or actively-moving bills requiring that high school graduates be financially literate. Still, only about 15, including South Carolina, have met the “gold standard” of requiring high schoolers to pass a standalone course on personal financial literacy.
By joining the ranks of states requiring high school graduates to pass a standalone personal financial literacy class, South Carolina is helping combat a lack of financial literacy among adults in the United States. And even those technically considered financially literate could use some refreshers: a majority of Americans live paycheck-to-paycheck and do not keep a budget! Giving teenagers knowledge and tools to take control of their finances can help these incoming adults reduce stress, poor financial decisions, wasteful spending, and even bankruptcy.
The good news is that states are on the move regarding educating teenagers about money, spending, budgeting, and borrowing. In 1998, less than half of states included personal finance education in their public education standards! Fortunately, by 2020, all but five states have done so! While drastic improvements have been made, all fifty states should implement the “gold standard” of having a required personal financial literacy course in high schools. Some states, such as Texas, require high schools to offer a personal financial literacy course, but students do not have to take it.
Personal Financial Literacy Should Join the Curricula
Of states that do require students to pass a standalone personal financial literacy class, the class is a very reasonable one-semester course. Given the real-world benefits of financial literacy, all states should be able to find room in their respective high school curricula for a one-semester course! Unfortunately, a few states seem to have waffled at the last second and allowed “personal financial literacy” to include programs or units within other existing courses, such as Economics or Accounting. While most states require high schoolers to pass a one-semester Economics course, only a small portion of the course deals with personal financial literacy.
Hopefully, states will add Personal Financial Literacy in addition to Economics, rather than as a substitute. Texas, for example, will allow a Personal Financial Literacy and Economics class to be taken instead of a traditional Economics class beginning this fall. This is a positive step that will lead to more students taking a personal financial literacy class, but students would benefit more by taking both courses separately. Given all there is to learn about both Economics and Personal Financial Literacy, they should not be combined into a single one-semester course. A solution would be to link the courses together into a year-long course required for seniors in high school, perhaps with students learning Economics in the fall and Personal Financial Literacy in the spring.