According to Ramsey Solutions, 30 states (and counting) require schools to offer personal finance in high school. That doesn’t mean all 30 require students to actually take a personal finance course to graduate. Only 17 states have made personal finance a graduation requirement. Some states don’t even require a course, or they just implement personal finance into another course, or some branch off and do their own thing. It’s important to illustrate why financial literacy matters.

Michigan is now officially the 14th state in the U.S. to guarantee that its students have access to a personal finance education course before high school graduation. The Florida Senate Bill 1054, also known as the Dorothy L. Hukill Financial Literacy Act, requires high school students in Florida to take a stand-alone personal finance course before graduating. This bill was named after Senator Dorothy Hukill, who spent her career advocating for financial literacy education in Florida schools.

Finally, on March 22, 2022, Governor Ron DeSantis signed the bill into law, stating that “financial literacy is an important life skill for a student to have,” CBS News tells us. There are many that don’t believe in the necessity of financial literacy. However, there are those that know from experience how important it is.

Here are some arguments for why Financial Education Matters:

1. Individuals face more complex decisions than in recent decades Says Morrison, “Americans are increasingly responsible for their own financial futures. Employees have seen a dramatic shift from pension plans to 401(k) plans. The rise of the gig economy means individuals must budget and save for healthcare and retirement themselves.”
2. Debt levels should create a sense of urgency Americans owe over $1 trillion in credit card debt and car loan debt. They owe more than $1.6 trillion in student loan debt and $10 trillion in residential mortgages.

   There is a huge amount at stake. Borrowing has become such a routine part of household finances that it is essential to teach people how to figure out how much debt they can afford to take on, how to get the best terms on their debt, when refinancing makes sense and the consequences of not keeping up with debt payments.

3. Learning financial literacy by experience is more expensive than in the classroomTraditionally, people have gained knowledge about personal finances by experience. They started slowly and gradually made bigger financial decisions as they gained more experience.

   Today, though, when it is possible to get hundreds of thousands of dollars in debt before you leave college and credit offers are just a click away on any computer, people can’t afford to wait to gain experience before learning about personal finance. The cost of making mistakes is just too high.

4. Financial education takes time to pay offIt is likely too soon to judge the results in terms of behavior of the general population. After all, most financial literacy requirements have only been put in place since the Great Recession. So, while most of the adult population was not raised on personal finance education, Morrison says the CEE has seen positive near-term signs from students who have received this type of schooling: “In states with requirements, there is evidence that their students, in the years immediately following high school, have higher credit scores, lower loan default rates, less credit card debt.” There are also signs these students are making better decisions about financing college than students who have not had personal finance education.
5. The consequences of poor financial knowledge are long-lastingAnother reason why financial education is so important is that, without it, young adults may have to live with the consequences of their mistakes for a long time. Credit can take years to repair, and student loan debt is dogging some graduates for decades. Some well-spent classroom time in high school could save those students many years of regrets later on.

Anthoni Duncan

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