The percentage of students receiving personal finance training

The percentage of students receiving personal finance training

When you graduated from high school, did you know how to create a budget? Did you have any idea what stocks and bonds were? Did you know how to do your own taxes?

For many Americans, the answer to these questions is probably “no.” Alone 22.7% of American high school students are guaranteed to receive training in personal finance. While it is from 16.4% in 2018, this still represents a small fraction of students.

This chart uses data from Next Generation Personal Finance (NGPF) to show the percentage of high school students required to take a personal finance course by state.

A Closer Look at Personal Finance Education at the State Level

A standalone personal finance course has been defined as a course of at least one semester, which is equivalent to 60 consecutive teaching hours. Here’s the percentage of students in each state who took a required (not optional) personal finance course.

State/Territory % of students required to take the personal finance course
Mississippi 100.0%
Missouri 100.0%
Virginia 100.0%
Tennessee 99.7%
Alabama 99.6%
Utah 99.6%
Iowa 91.3%
North Carolina 89.2%
Oklahoma 47.1%
New Jersey 43.0%
Nebraska 42.8%
Kansas 40.8%
Wyoming 38.3%
Arkansas 34.6%
Wisconsin 33.5%
South Dakota 27.1%
Ohio 23.5%
Pennsylvania 16.2%
Maine 15.6%
Rhode Island 14.8%
Connecticut 14.7%
Illinois 13.9%
Maryland 12.5%
North Dakota 12.2%
Vermont 12.1%
Nevada 11.0%
Indiana 10.9%
Oregon 7.5%
Minnesota 6.9%
Montana 6.9%
New Hampshire 6.0%
Kentucky 5.5%
Colorado 5.4%
Delaware 5.0%
Massachusetts 5.0%
West Virginia 3.2%
Louisiana 2.7%
Washington 2.4%
Texas 2.2%
New York 2.0%
Michigan 1.7%
Idaho 1.4%
Arizona 1.0%
California 0.8%
Caroline from the south 0.8%
Alaska 0.6%
Florida 0.4%
New Mexico 0.4%
Georgia 0.0%
Hawaii 0.0%
washington d.c. 0.0%

Eight states currently have statewide requirements for a personal finance course: Alabama, Mississippi, Missouri, Iowa, North Carolina, Tennessee, Utah, and Virginia. Naturally, the level of personal finance education is highest in these states.

Five states have begun the process of implementing a requirement, with Florida being the most populous state yet to ensure personal finance education for high school students. The state previously required schools to offer a personal finance course as an elective, but only 5% students took the course.

Apart from the warranty conditions, only 9.3% of students are required to take a course in personal finance. This number drops to 5% for schools that have a high percentage of black or brown students, while students eligible for a free or reduced lunch program (i.e. low-income students) also hovers. around the 5% figure.

Why is personal financial education important?

The majority of Americans believe that parents have a responsibility to teach their children about personal finance. However, almost a third of parents say they never talk to their children on finance. Teaching personal finance in school is one way to help fill this gap.

People who have received financial education tend to have a higher level of financial literacy. In turn, this can make people less likely to face financial hardship.

People with low levels of financial literacy were five times more likely to be unable to cover a month of living expenses, compared to those with high financial literacy. Separate research found that implementing a state mandate for personal finance education led to improved credit ratings and reduced delinquency rates.

Additionally, financial education can play a key role in building wealth. A survey revealed that only one third of millionaires averaged a six-figure income over their careers. Instead of relying on high salaries, the success of most millionaires has come from applying basic personal finance principles: invest early and consistently, avoid credit card debt, and spend wisely. using tools such as budgets and coupons.

Expand access to financial education

Once current state requirements have been fully implemented, more than a third of American high school students will have guaranteed access to a personal finance course. Momentum also extends beyond warranty states. There are 48 personal finance bills pending in 18 states according to the NGPF financial education bill tracking.

Above all, 88% of adults surveyed support personal finance training mandates and most also wish they had been forced to take a personal finance course themselves.

When we ask the next generation of graduates if they understand how to budget, they’re more likely to answer “yes” confidently.

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