Opinion: The Potential of Personal Finance Education

In high school, we learn geometry, poetry,  and the name of every founding father. But how often will we use this knowledge as adults? Many students enter the workforce directly after high school without learning  the life skills needed to manage first jobs, mortgages, and tax forms. A Forbes article explained that “frustrated business owners are increasingly disappointed with the lack of preparation and financial savvy of recent graduates and prospective candidates.” One report estimates 44% of Americans can’t cover a $400 emergency fund without going into debt, and 56% of Americans have less than $10,000 in retirement savings.

The recent passage of the California Financial Literacy Mandate requires high schools across the state to introduce personal finance courses by 2027 and institute them as a graduation requirement by 2031. Personal finance education is beneficial for all students: it’s one of the only courses that students will use after high school, and taking the course can help students save money and achieve financial stability.

High schools have a responsibility to prepare students for the rest of their lives. While Shakespeare and ancient Egypt may never come up after high school, students will deal with personal finances on a daily basis. Whether it be through student loans, federal aid, or figuring out future housing, graduating students are on the cusp of adulthood’s financial stresses and responsibilities.

Personal finance may be one of the only classes students need after high school. “There are plenty of students that understand, rightly, that their future is not academic,” economics teacher Jack Neumeier said. Many students go directly into the workforce, where they will immediately be faced with financial responsibilities, where personal finance would be their most relevant course taken in high school.

Learning personal finance would be extremely beneficial for all students, regardless of their future path. Nationally, Americans’ financial literacy rates have been on the decline. Teaching personal finance now is a chance to prevent future mistakes. Americans pay an average of $577 per year in late fees, overdrafts, and fraud-related charges. That’s $5,770 in 10 years, which can compound from unpaid credit card debt or further financial instability. 

Local nonprofit Next Gen Personal Finance provides educators with certifications and resources to teach personal finance across the country. Tim Ranzetta, NGPF’s founder, believes in personal finance education’s positive impacts.

“The lifetime benefit is over $100,000 and can have a really great benefit on students and their families,” Ranzetta said. The amount is calculated from potential savings from case studies of personal finance education, including post-secondary debt benefits, retirement savings, reduced borrowing costs, reduced home and auto loans, and reduced insurance costs.

Courtesy Tyton Partners Lifetime Value of Financial Education in High School.

Ranzetta attended Eastside Academy in East Palo Alto, where he later went back to teach. “The students were taking the personal finance lessons home, and that really showed me the multigenerational impact finance education could have,” Ranzetta said. 

Personal finance education can create generational cycles of financial stability and provide students with an opportunity to learn and experiment with finances before adulthood. 74% of teens don’t feel confident in their financial education, and many won’t learn at home or through higher education. 

 87% of teens report their parents are their main source of financial education, so while wealthy families continue to pass down personal finance knowledge, families where parents may be ill-informed or lack financial literacy continue to face barriers to building wealth. 

In today’s world, amidst higher prices and a rapidly changing economy, personal finance is more important than ever.  “The economic ground that we’re entering, as young people, is truly harder. The margins are thinner. It’s even more important to start early,” Neumeier said.  “In our world, investing is not a way to get ahead, it’s a way to get even.”

While adding a personal finance course presents its own challenges, it would ultimately be worthwhile for the M-A community. Teaching personal finance has a ripple effect on students, their families, and even faculty. Ranzetta discussed how NGPF’s professional development certifications and personal finance course materials have been well-received among educators. “The teachers find it helps them in their own lives in addition to bringing ideas to their classroom,” he said.

Learning personal finance at school could break generational cycles of inequality, help students achieve financial stability, and save them thousands of dollars. Ultimately, a personal finance course could have lasting impacts, with the potential to transform students’ lives and wallets. 

Abby is a senior in her first year of journalism. She is interested in writing about student culture, economics, and new coffee shops.

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