Bringing Personal Finance to the Classroom for Generation Z

“When it’s mandated, everyone receives access,” said Rebecca Maxcy, director of the Financial Education Initiative at the University of Chicago.

While the progress among states is encouraging, there is more to do, said Nan J. Morrison, president and chief executive of the Council for Economic Education. Currently, just nine of the 23 states require personal finance to be taken as a stand-alone course. Others permit the subject to be combined with other classes, like math or social studies, or provide other ways for students to opt out of the course, which may dilute its impact.

Along with the new report, the council announced the creation, along with Visa, of a coalition of businesses and nonprofit groups, called FinEd50, to help promote “guaranteed access” to personal finance courses in all states.

Here are some questions and answers about financial literacy education:

Sometimes. But growth in state requirements for economics instruction has stalled. Two years ago, 25 states required a high school course in economics, and that number hasn’t budged, the Council for Economic Education’s report found. And two states have recently considered removing requirements for studying economics.

“We’re actually kind of worried about this,” Ms. Morrison said.

She said the council would take a closer look at why efforts to expand economics education had stagnated. Students need an understanding of both economics and personal finance, she said, “to successfully navigate their lives” as individuals and as members of increasingly complex societies.

There has been debate over what works, with some studies suggesting that financial education has limited effect on behavior, or that students may be better off simply learning more math. But more recent research suggests that high school personal finance lessons can help young people make better financial decisions.

A study published in 2020 led by a researcher at Montana State University found that financial education requirements were linked to fewer defaults and higher credit scores among young adults. And a 2019 study from the University of Wisconsin-Madison found that mandates “significantly reduced” the likelihood of borrowing high-interest payday loans. As with any subject, Professor Lusardi said, effective instruction requires a high-quality curriculum and well-trained teachers.

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