Bringing personal finance into the classroom for Generation Z

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

While the progress among states is encouraging, there is more to be done, said Nan J. Morrison, president and CEO of the Council for Economic Education. Currently, only nine of the 23 states require personal finance to be taken as a stand-alone course. Others allow the subject to be combined with other classes, such as math or social studies, or provide other ways for students to opt out of the course, which can 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 every state.

Here are some questions and answers about financial education:

Sometimes. But the growth of state requirements for teaching economics has stalled. Two years ago, 25 states required a high school course in economics, and that number hasn’t budged, according to the Council for Economic Education report. And two states have recently considered dropping requirements to study economics.

“Actually, we’re a little concerned about this,” Morrison said.

She said the council would take a closer look at why efforts to expand economic education had stalled. 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 about what works, with some studies suggesting that financial education has a limited effect on behavior, or that students may be better off simply learning more math. But more recent research suggests that personal finance lessons in high school 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 taking out high-interest payday loans. As with any subject, Professor Lusardi said, effective instruction requires high-quality curriculum and well-trained teachers.

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