Is Financial Literacy Required in School

Is Financial Literacy Required in School?

Is financial literacy taught in schools?

While many states in recent years have started to mandate some financial literacy in schools, on average, most elementary and high schools across the United States do not teach an adequate amount of financial literacy. In addition, most colleges and universities also drop the ball when preparing their students to manage their finances.

But should financial literacy be taught in schools? How much is an adequate amount? Are students ready to learn these skills, and what do we do to address the gaps?

Why Is Financial Literacy Important for Youth?


My book Your Kids, Their Money relays a story about Allison Ball, the Kentucky State Treasurer, speaking to a group of high school students about managing credit. While talking to the group, she noticed the students giving her “quizzical looks.” She later realized that not one student in the group knew what she was talking about when she mentioned “interest.”  

We need to ensure young people have a basic level of financial literacy before they become adults. I often talk about my struggles as a young adult because I lacked an understanding of credit and debt. That lead me to make disastrous decisions with my money, and this isn’t surprising. Research has shown that financially literate people:

  • Make more informed financial decisions.
  • Maximize their earning potential
  • More capable of managing financial emergencies
  • Accumulate more wealth. 
  • Maintain less debt
  • Obtain their financial goals
  • Take advantage of the compounding of returns and interest over time.
  • More likely to reach a state of mental and financial 
Students raising their hands in front of their teacher

It is never too early to start teaching children about financial literacy. Teaching kids about money and how to handle it responsibly is one of the most important things we can do for their future. I would argue that kids need to be taught early on the importance of saving money, budgeting, and making smart financial decisions.


Since they don’t get this information from school, if they don’t learn these things at home, they may never fully understand them, and as we saw in my case, that could lead to serious financial trouble down the road.

Can Financial Literacy be Taught in Schools?


Yes, 100 times yes. I miss the days of home economics. My home-ec. taught budgeting, career development, and how to be thrifty. Definitely not all of the principles of financial literacy, but a helpful start, to be sure.  

Unfortunately, many school curriculums have removed the concept of learning how to manage a home or a budget. Now what most children get in terms of financial literacy are basic money identification lessons and money math. This is not sufficient. 

A study by The National Foundation for Credit Counseling found that students who took a personal finance class scored higher on tests measuring financial literacy than those who did not take a class. But, like any skill taking one class is not sufficient to learn it to its fullest. Also, considering that children learn at different paces, starting the learning early is critical. Children must repeatedly hear and learn about these concepts to ensure they are understood. We also need to ensure we expand on these financial literacy ideas as children mature.

Saving Money as Part of Financial Literacy

Learning about financial literacy is no different than learning other skills. And with informed and engaged teachers, there is no reason to think they can not teach financial literacy in all classrooms at all levels. Of course, many nuances to teaching children of different ages and abilities. But the basic concepts like living on less than you earn, protecting your wealth, and understanding taxes are more than learnable. 

Teaching kids about money isn’t always easy, but it is worth the effort. If financial literacy were required in schools, the value to the child and society would far outpace the program’s cost. Moreover, I think the value to the student would outweigh many subjects mandated in the classroom.

Are Schools Teaching the Next Generation Enough about Money and Finances?

Many states and school boards have started to include financial literacy in their curriculums. But even with these new mandates, many students are in areas without a mandated financial literacy curriculum.

And even when school boards do mandate financial literacy, there are challenges. Many states are not supplying enough course time, funding, or materials to adequately prepare students. While I agree some is better than none, I think we need to do better.  

As the Academic Director of the Global Financial Literacy Excellence Center at George Washington University, noted. “We see states that don’t require the student to pass the course, or they don’t train the teachers, or it’s an unfunded mandate.”

That is why an AIG report found that only 40% of students who graduated from high school within states with a mandatory personal finance class reported having taken the course.

Currently, the number of school boards that fully support teachers in giving adequate financial literacy training to prepare the next generation is still far too low.

Graduating Students Tossing their Caps Up in the Air

What Can be Done to Make Up the Gap?


Since most schools still do not require financial literacy classes, we, as parents and guardians, must ensure that our students don’t fall behind. In most cases, it is up to us to help fill this need and find resources outside of schooling to support their students.

That means teaching them how to handle money, save it, spend it wisely, and make it work for them. There are several ways to do this, including books, apps, and games. You can also start giving your children allowances early, so they learn how to manage their money.

Most importantly, you can prioritize talking about money and money matters with the youth in your life. Money is still too often seen as a taboo subject. People can feel uncomfortable talking about it. We need to talk about money openly and honestly with our kids to ensure they learn what they should and should do and how to have a healthy relationship with money. That can only happen if we are transparent about our finances.

Financial Literacy: The Key to a Successful Future


While financial literacy is not always required in school, we can see the many benefits of teaching it to our children. Financially literate students are more likely to make responsible financial decisions and achieve long-term financial stability as adults. As a result, educators need to consider incorporating financial literacy into their curricula. But until they do, it will be up to the parents and guardians to ensure the youth in our lives are getting an adequate financial literacy education to prepare them for their futures.