America’s schools aren’t making the grade, if you ask the Council for Economic Education. The organization’s mission is to help teach personal finance and economics to students from kindergarten through 12th grade. And part of its aim is to officially add financial education to state-required curriculums, complete with standardized testing.
But progress toward that goal has been slow at best. The good news is that all states and the District of Columbia do include economic education in K-12 standards, but five states (Alaska, California, New Mexico, Montana and Wyoming) and D.C. exclude personal finance education from those standards, according to CEE’s 2018 Survey of the States. More bad news: The number of states that require a high school personal finance course in order to graduate has been stagnant at 17 since 2014. Likewise, only seven states have required standardized testing on personal finance since 2016.
“Thinking back 10 years ago to the financial crisis and all the work that people had done to dig out of that, the fact that … we’re seeing this status quo as far as states picking up the charge, it’s a little disappointing, to be frank,” says Christopher Caltabiano, chief program officer at CEE.
[See: 9 Financial Tools You Should Be Using.]
San Diego-based certified financial planner Taylor Schulte offers stronger criticism. “I think the state of financial literacy in schools is pathetic,” he says. “Our school systems will spend countless man hours debating how math should be taught while most students don’t even know the difference between a credit and debit card. It does seem like things are starting to move in the right direction, but we are a long way from where we should be.”
Why is state-level regulation necessary on this subject? To answer, Caltabiano quotes a former colleague and teacher: “If it’s not tested, it’s not taught.” According to Caltabiano, without standard requirements and more importantly, standardized tests, to illustrate financial literacy, there can be no certainty that students are receiving the education they need to understand how money works. “It implies that we’re educating another generation of students who aren’t prepared to manage their personal lives,” he says.
Even kids seem to want more financial education. A whopping 95 percent of teenagers said they would value personal finance programs being taught in their schools, according to a survey by insurance and finance company AIG and Junior Achievement USA, an organization that provides business, economic and financial education to young people.
Additionally, formal money education classes can have a strong impact on children’s futures: Young adults who did receive some financial education in school are more likely to have good savings habits compared with those who did not, according to financial services firm T. Rowe Price’s Parents, Kids & Money Survey.
[See: 12 Ways to Be a More Mindful Spender.]
Despite such supporting evidence, the mandate for financial education in schools faces big obstacles. “There are so many competing priorities,” Caltabiano says. “Every group has their association that’s pushing for state-level requirements, so it’s a crowded space.”
Plus, he adds, “changing curriculum takes time.” On that front, at least, personal finance has an edge in that it can be integrated into courses that are already being taught, such as math and business. “There is the opportunity to take those classes and infuse financial literacy concepts in a way that students are getting the lessons, but teachers aren’t being forced to completely blow up existing curriculum to be able to do so,” he says.
If you’d like to push for more financial education in schools, Caltabiano suggests speaking up. People supporting the cause “can be talking to the schools in their communities … and making the case for why this information is important,” he says, noting that CEE’s website provides guidance for whom to contact and what language to use. “Having that groundswell of support — they’re going to listen to parents and neighbors.”
In the meantime, you can work to promote your own children’s financial literacy at home — and it could actually mean more to your kids than in-school lessons. Among young adults who received financial education in school, 34 percent said that what they learned from their parents had a greater influence on their money habits and behaviors, according to the T. Rowe Price survey.
“It’s absolutely a great idea to take things into your own hands, especially since our behaviors and habits toward money begin to develop around age 7 or 8,” Schulte says. He recommends starting your financial home-schooling by heading to the bank and opening a savings account with your child. “When that first statement shows up, use it as a tool to continue teaching them about money,” Schulte says. “Show them how interest is calculated, how to look for fees and the power of starting to save early.”
[See: How to Talk to Millennials About Money.]
Marguerita M. Cheng, a certified financial planner based in Gaithersburg, Maryland, agrees that firsthand experience with managing a savings account, as well as physical cash, is a good way to introduce and drive home financial lessons with your kids. She even suggests integrating money talks into your daily activities, discussing the financial aspects of shopping, cooking and going to the movies, for example. That way you can show them how money concepts apply in the real world and their personal lives.
One problem, though, with relying on parents to pass on money lessons to their kids: “Parents don’t always have the best financial education themselves,” Cheng says. Indeed, only 55 percent of adults in the U.S. give themselves an A or B grade when it comes to their knowledge of personal finance, according to the 2018 Consumer Financial Literacy Survey from the National Foundation for Credit Counseling. The lack of high marks might explain why 66 percent of parents are reluctant to talk about money with their 8- to 14-year-old kids, and 21 percent say they are extremely uncomfortable discussing finances, according to the T. Rowe Price survey.
And that is the first hurdle to jump when it comes to any financial education: recognizing that money should not be a taboo subject, and that all Americans, adults and children have plenty to learn on the subject. “I think there’s a lot of embarrassment around the financial mistakes that we make, but you know what? We all make them,” Caltabiano says. “Being able to talk about them with our young people … I think that in and of itself is really important.”
More from U.S. News
10 Ways to Improve Your Finances with Social Media
11 Money Moves to Make Before You Turn 40
6 Ways to Treat Yourself on a Budget
Having to Home-School Your Kids About Money originally appeared on usnews.com
