Financial literacy is unquestionably one of the most important life skills adults are expected to master. Balancing a checkbook, understanding the true costs of borrowing money, calculating compound interest payments, and devising a personal budget are all things that functional adults will need to learn.
These skills are taught in public high schools with various degrees of success. According to one recent study conducted by the Vermont-based Center for Financial Literacy at Champlain College, the states of Virginia, Tennessee, Utah, Alabama, and Missouri all earned an A rating in financial literacy instruction for mandating that all high school students take at least one semester of financial literacy instruction before graduation.
California schools, however, earned an F rating. The California Department of Education offers advice detailing how to fold financial literacy instruction into lesson plans for other subjects on their website, and it is also included in the state’s History and Social Science Framework. However, there is no mandate for California students to attend dedicated financial literacy instruction at all.
This does not mean that all Californian students are missing out on a quality education, as some schools in the state offer adequate instruction without a government mandate. These include San Bernadino City Unified, Brawley Union High School, Huntington Beach High School, Los Angeles’s Hamilton High School, San Diego United, and a few others.
However, many activist groups still find the current state of affairs deeply troubling. For example, the California Council on Economic Education is a nonprofit group dedicated to financial literacy and economics instruction in the state. Their Director of Programs and Outreach, Joshua Mitton, was quoted in a recent interview stating that California school districts have “a lot of leeway” in how, and even if financial literacy instruction is presented to students.
Some Californian schools offer financial literacy courses to students as an elective, meaning that it is offered but not mandatory in order to graduate. Others incorporate it into math or social studies. Some schools even offer financial literacy instruction after traditional school hours. Most, however, do none of these.
Sadly, students most in need of financial literacy instruction are those least likely to get it, at least according to a 2017 study conducted by Next Gen Personal Finance. The study found that formal financial literacy instruction was most common in California’s most affluent neighborhoods, where students would have the resources to seek instruction on their own. It was least common in lower-income areas where students are more likely to be limited to whatever their school offers.
California parents and teachers looking to supplement financial literacy instruction can find helpful resources on websites such as Next Gen Personal Finance, the Council for Economic Education, and the Jumpstart Coalition. The programs offered by these organizations include age-appropriate financial literacy instruction for K-12 age students. The youngest students are taught basic economic concepts such as denominations of bills and coins that may be exchanged for goods and services, while high school seniors are taught more advanced concepts such as compound interest and the value of investing.
Instruction may also include career guidance. This program encourages students to first define what their dream lifestyle looks like and then actively research what it would cost to get there in terms of education and income. The real costs of student loans are incorporated to prepare participating students for the realities they will face in the 21st century.
While many experts agree that California’s failing grade in financial literacy instruction is disconcerting, students may still be prepared for their adult lives using the resources highlighted above. California’s formal education standards may also change if activists such as the California Council on Economic Education get a say in the matter.