Personal Finance Education in High School: A Growing Need

That would certainly be a good thing.

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Key points

• New data reveals that 88% of adults think their state should require a personal finance course during high school.
• There are important lessons worth teaching teens before they enter adulthood.

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High school students routinely take classes like algebra, trigonometry, and calculus. But how many students learn how to set up and follow up a household budget, or how to use credit cards effectively?

The reality is that personal finance classes are not a fixture in many schools' curriculum. But that could soon change.

Parents support financial education

In a recent survey by the National Endowment for Financial Education, 88% of respondents said they feel their state should require a personal finance course prior to high school graduation. Specifically, those surveyed think students should be taught about the following:

• Spending and budgeting
• Managing credit
• Saving money
• Earning money
• Investing
• Managing risk

A report by nonprofit Next Gen Personal Finance says that only 25% of current high school students have access to some type of personal finance course. But a number of states have active bills requiring personal finance education, and some are set to become law this year. That's definitely a good thing, because teaching students to manage money could set them up to make savvy decisions once they move away from home and start living independently.

How to get your children started

It's a positive thing to see more states being proactive about teaching personal finance. But you don't have to wait for specific courses to hit your school district. Instead, there are steps you can take on your own to set your kids on a solid path.

For one thing, you can share your household budget with them if you're comfortable with that idea. If not, you can create a mock budget that allows them to allocate funds for different bills as well as savings.

Next, explain how credit cards work. It's worth telling your kids that credit cards aren't necessarily evil, but that they can lead to overspending. Being careful with credit card usage, however, could mean enjoying perks like cash back without having to deal with the negative aspects, like interest charges and late payment fees.

It's also very important to teach your children about having an emergency fund. You might even choose to share some stories of bills that caught you by surprise (perhaps a home repair or car repair) so they recognize why savings are so necessary.

Present real-world financial experiences

If your kids are a bit older, you can start talking through the concept of investing and growing wealth. If you're able to open a brokerage account and buy a couple of stocks to track, even better.

In fact, a good way to get kids excited about investing is to let them buy shares of a company they're familiar with. If your children like to eat at McDonald's, for example, you might choose to buy that stock specifically.

No matter what topics you cover, talking about personal finance is a great thing to do for your kids. And while they'll hopefully end up getting some of that knowledge at school, it certainly wouldn't hurt for them to be able to access it at home.