Bonnie Munguia/Brawley Union High School
Teacher Cindy Hardy dresses as a calculator for Halloween in her financial algebra class at Brawley Union High School.

California’s efforts to teach high school students about balancing checkbooks, saving money and other staples of personal finance were graded an ‘F’ in a national survey released last week.

The report, by the Center for Financial Literacy at Champlain College in Vermont, looked at how many hours of financial literacy instruction are required of high school students in all 50 states and the District of Columbia. ‘A’ grades went to Virginia, Utah, Missouri, Tennessee and Alabama, where all students are required to take at least one semester of financial literacy before they graduate.

The California Department of Education offers guidelines for K-12 teachers to incorporate financial literacy in their lesson plans and the state’s History-Social Science Framework includes financial literacy, but the topic is not required.

Some districts in the state include the subject as an elective, part of a math class or as an after-school activity, but many offer no financial literacy instruction at all.

“Districts in California have a lot of latitude as to whether they include this or not,” said Joshua Mitton, director of programs and outreach at the California Council on Economic Education, a nonprofit that promotes financial literacy and economics instruction in California K-12 schools.

“The question is, though, are we preparing students for the complex realities they’re going to face?” he said. “Student loans, buying a home, affording a car, choosing a credit card … these are basic skills you need just to survive and keep pace.”

Free financial literacy course material is available online for all teachers. Among those recommended by the state Department of Education are the Jumpstart Coalition, Next Gen Personal Finance and Council for Economic Education.

Most of the curriculum starts in kindergarten, with children learning how coins and bills represent certain values and can be traded for goods and services, and extends to 12th grade, with students learning how compound interest works, the value of investments, the actual cost of student loans and other more complicated financial topics.

It also includes career guidance. In one exercise, students are asked to describe their “dream lifestyle” — where they want to live, what car they want to drive, where they want to go on vacation. Then they estimate the cost of those items and how much they’d have to earn to afford them. They research salaries, how much college education is required for different careers and the cost of student loans.

“Debt, credit cards, saving for retirement — most people learn these things on the fly, through the school of hard knocks, and they make a lot of mistakes,” said Paul Golden, spokesman for the National Endowment for Financial Education. “These are life skills with large societal implications.”

Until the 1940s, financial literacy was a core component of high school math education in the U.S., but after World War II it was replaced by more theoretical math instruction, said John Pelletier, director of the Center for Financial Literacy.

Lack of personal finance education can have broad economic impacts, he said. The 2008 recession was caused in part by consumers obtaining subprime, adjustable-rate home mortgages they couldn’t afford, which led to a collapse of the housing market, bank closures and widespread layoffs.

“With the subprime mortgages, a lot of good people made a lot of big mistakes. They didn’t know what they didn’t know, and they trusted the lenders,” Pelletier said. “We’re still struggling to recover.”

Some schools in California offer financial literacy courses to their students. San Bernardino City Unified, Huntington Beach High School, Brawley Union High School, Hamilton High School in Los Angeles and San Diego Unified, among others, offer financial literacy courses either through economics, social studies or math departments. Some have financial literacy classes that meet the A-G requirements for admittance to California State University and University of California campuses.

But it’s not nearly enough, Pelletier said. Of particular concern, he said, is that low-income students are much less likely to attend schools that offer financial literacy than more affluent students, according to a 2017 study by Next Gen Personal Finance.

“The folks who need this the most are the ones least likely to get it,” he said. “We need to do more.”

SHARE ARTICLE

Comments (4)

Leave a Comment

Your email address will not be published. Required fields are marked *

Comments Policy

The goal of the comments section on EdSource is to facilitate thoughtful conversation about content published on our website. Click here for EdSource's Comments Policy.

  1. Melinda 7 months ago7 months ago

    The credit union I work for provides some financial literacy training to our local high schools. The initiative is largely placed on teacher to seek out additional curriculum and there are some great champions for it within our local districts. We also work with the Richard Myles Johnson Foundation which puts on an interactive simulation program called Bite of Reality which allows students to adopt an adult persona, complete with a job, salary, family and … Read More

    The credit union I work for provides some financial literacy training to our local high schools. The initiative is largely placed on teacher to seek out additional curriculum and there are some great champions for it within our local districts. We also work with the Richard Myles Johnson Foundation which puts on an interactive simulation program called Bite of Reality which allows students to adopt an adult persona, complete with a job, salary, family and bills. They then have to use their budget to purchase all the normal things an adult would, a car, housing, child care, household items, etc. It really does give the kids great insight to adult life.

  2. FloydThursby 7 months ago7 months ago

    Parents have to teach this. If parents have kids out of wedlock or divorce, knowing kids have far lower odds of college graduation and higher odds of prison or homelessness or minimum wage or unemployment without 2 parents in the home, kids follow that. They will choose blowing money on something fun over saving. We call kids who study a lot nerds. We dismiss models as myths and don't give credit … Read More

    Parents have to teach this. If parents have kids out of wedlock or divorce, knowing kids have far lower odds of college graduation and higher odds of prison or homelessness or minimum wage or unemployment without 2 parents in the home, kids follow that. They will choose blowing money on something fun over saving. We call kids who study a lot nerds. We dismiss models as myths and don’t give credit to kids who work hard in school knowing it takes 10-20 years to profit from it. Short-term pleasure wins. We need to teach this to kids. 40% of adults couldn’t come up with $500 in an emergency and over half couldn’t come up with $2000. No one is thinking long-term.

  3. Susan Mulcaire 7 months ago7 months ago

    I teach financial literacy (https://www.financialliteracylessons.com/). This grade is sad news for California students. Everyone, from every walk of life, needs and deserves to be financially literate. Everyone deserves the opportunity to learn about the importance of building personal wealth. Wealth is more than the ownership of assets. As we all know, wealth is power. It is the ability to be heard and to influence. No one knows this better than someone living an isolating … Read More

    I teach financial literacy (https://www.financialliteracylessons.com/). This grade is sad news for California students. Everyone, from every walk of life, needs and deserves to be financially literate. Everyone deserves the opportunity to learn about the importance of building personal wealth.

    Wealth is more than the ownership of assets. As we all know, wealth is power. It is the ability to be heard and to influence. No one knows this better than someone living an isolating and powerless life of poverty. Wealth is access. We’re not talking access to private jets or exclusive clubs. We’re talking social mobility. Wealth is the ticket to living in a better, safer neighborhood, a good education, better health care, and other quality of life items. Wealth means the ability to sleep at night not worried that an even minor financial crisis could spell disaster for you and your family. Sadly, in the last few years we’ve also come to see that, in the U.S., disparities in wealth can lead to vastly different outcomes in the justice system. So yes, wealth is justice. A good financial literacy program changes students’ relationships with money and their perceptions of wealth.

    Our students’ financial futures include things like online-only banks, virtual currency, round up apps, the gig economy, freelancing, non-spousal joint debt, and working for a multinational company, just to name a few. Students also face challenges unique to the 21st century such as an unstable Social Security fund, high levels of student debt, declining homeownership levels, and longer life expectancies which require greater retirement savings. GenZ students need authentic objectives designed to meet their 21st century personal finance and money management needs.

  4. Fred Jones 7 months ago7 months ago

    And how will the recently rolled out dashboard help alleviate this troubling reality? How about locally-developed LCAPs?

    The curricular narrowing phenomenon under NCLB and API will continue unabated until and unless state policymakers provide more clarity about statewide educational priorities. Until then, districts will focus only on the truly prioritized subject-matter (ELA/Math).