Tom Greene is the National Legislative Director for ExcelinEd in Action. In this role, he manages the organization’s advocacy team and works with leaders and lawmakers from across the states to promote student-centered solutions.
Financial literacy is the understanding of money-handling skills, such as budgeting, saving, handling debt and investing. For many, learning about personal finance is a lifelong journey. The earlier students can start learning the basics of money management, the better off they will be.
According to recent data, more than 5.7 million U.S. households are behind on rent or mortgage payments, owing nearly $20 billion in total. Pew researchers calculated that debt collection lawsuits represented approximately 24% of the nation’s civil caseload. As a society, we clearly can benefit from improved financial literacy.
Financial literacy is a crucial skill set that empowers everyone—even middle school and high school students—to make informed and responsible decisions about their personal finances. As these students transition into adulthood, they will face financial tasks such as managing a budget, saving for future goals and navigating the complexities of credit and loans. By equipping students with a solid foundation in financial literacy, schools contribute to the development of responsible and financially savvy individuals who are better prepared to handle the demands of the real world.
Furthermore, financial literacy education helps students cultivate essential skills to enhance their lives. Budgeting, understanding the implications of loans and grasping the concepts of interest and investment provide practical knowledge that extends beyond the classroom. These skills empower students to navigate the complexities of the modern economy, fostering a sense of financial responsibility and independence. The ability to make informed decisions about money certainly benefits individuals, yet it also has broader societal implications. Financially literate citizens are less likely to fall into debt traps and are better positioned to contribute positively to the economy.
In an era of increasing financial complexity, early exposure to financial literacy can also play a role in reducing economic disparities. Students from all backgrounds and means should have access to the skills necessary for financial success.
State policies play a crucial role in financial education. During 2023 legislative sessions, four states prioritized financial literacy. This is how their policies improved:
Alabama
Alabama has been taking steps to improve personal finance education for its students since 2012.
In 2023, Alabama strengthened its financial literacy instruction requirement, requiring all high schools to offer a financial literacy course. Passing the course will soon be a requirement for graduation, as the legislation will take effect for students who enter high school in the 2024-2025 school year. Educators must cover topics that include bank accounts, principles of money management, credit, insurance, contracts, investments and other financial issues.
Idaho
For two decades, financial literacy advocates have been urging Idaho leaders to advance personal finance education policies.
In 2023, Idaho state leaders created a requirement that all high schools offer a financial literacy course and make it a requirement for graduation. The new legislation took effect for students who entered high school in the 2023-2024 school year.
Indiana
Indiana passed one of its first personal finance curriculum mandates in 2009. In 2023, Indiana enacted a policy requiring all high schools to offer a financial literacy course and made completing that course a requirement for high school graduation.
Louisiana
Since 2016, Louisiana has mandated that each public elementary or secondary school must offer personal finance instruction.
Louisiana strengthened its financial literacy instruction in 2023 by requiring all high school students to take a standalone financial literacy course. Passing the course will become a graduation requirement. The legislation will take effect for students who graduate in the 2026-2027 school year.
Increasingly, states are answering the call to improve financial literacy for students. States have begun to require that all high schools offer—and all students must take—a standalone financial literacy course. Some states allocate funding to build instructional capacity. Some are forging partnerships with colleges and universities to accept financial literacy credit.
It is clear financial literacy is a burgeoning K-12 education policy area. The ExcelinEd in Action team will be monitoring and providing state support along the way.
Be sure to follow @ExcelinEdinAction on social media and sign up for our email communications, so you are always in the loop about your state’s education policies.
To read more posts from this series, visit From Policy to Action: A Series Looking Back at 2023 Education Legislation.
