Personal Financial Literacy as a High School Graduation Requirement

The COVID-19 pandemic is having a devastating effect on our urban communities and is shining a light on the economic disparities in our societies. Many Americans are seeing a reduction in their household income while their household expenses are increasing. Even with unemployment insurance and government stimulus packages, the poor and working-class still struggle to make ends meet. The COVID-19 pandemic was an unpredictable event and unfortunately, many Americans were not financially prepared for this proverbial "rainy day". We can help future generations of high school graduates navigate unexpected economic events with financial education. For this reason, I am advocating for personal financial literacy to be a standalone course and a requirement for high school graduation.

Our children should leave school with the basic tools to be self-sufficient adults in society. I began a Personal Financial Literacy elective course at a Houston high school four years ago. The course has grown from just one class session to three per semester. I was inspired to teach the class because of my previous career as a Retail Banker and Financial Advisor. At the bank, I noticed that many of the customers lacked basic knowledge of banking, credit, and investing. Eventually, customers would make enough mistakes or be charged enough high fees to reach a point in which they are forced out of the banking system. Once out of the system they lack creditworthiness and affordable access to money. They must now rely on check-cashing services, high-interest payday loans, and subsidized housing. An article on the website Debt.org stated predatory lenders typically target minorities, the poor, the elderly, and the less educated.

Imagine if our community's newest adults were already equipped with a foundation of knowledge on personal money management. What if they could avoid paying excessive bank fees because they understand how overdrafts work. They can protect their creditworthiness by minimizing the use of student loans and effectively managing their repayment options. Imagine them making financial decisions based on careful consideration of their wants and needs. This and more could all be possible if students took a personal financial literacy course before leaving high school. The National Endowment for Financial Education (NEFE) found in its research that exposure to financial education shifts students from all backgrounds from high-cost to low-cost financing, thus changing student behavior and driving better outcomes.

I was shocked during a lesson on homeownership when a student asked how was it possible to buy a house without public housing assistance. However, another student encouraged me as she recounted explaining interest rates to her mother when she was applying for a home loan. These student interactions provided evidence of the lack of financial conversation and education in many households. According to Investopedia, nearly 89 percent of parents feel it's extremely important that their kids grow up with good financial habits, and nearly 91 percent agree they should be the ones teaching their children these habits. However, half of the parents (49 percent) say they don't know how to discuss money in ways they think their kids would actually understand and another 25% don't even try. How can some parents be expected to teach something they do not fully understand themselves? Schools should share the responsibility of teaching children personal finance by offering the class to every student and not just as an elective.

Opponents of adding financial literacy as a stand-alone course in Texas often mention how personal financial literacy is embedded in Economics courses; which are required for graduation. However, Economics is only a half-semester course and only one-third of the teaching standards relate to Personal Financial Literacy. In other words, the course spends twice as much time teaching students how to manage a business' money, than their own. Although students are being taught a basic understanding of personal finance, they do not have the time to adequately develop and practice financial decision-making skills. A stand-alone Personal Financial Literacy course will afford the teacher more time to expand students' knowledge of their own finances through more rigorous and practical instruction.

As a teacher and Fellow with NextGen Personal Finance (NGPF), I have advocated for more schools to include Personal Financial Literacy as a stand-alone course around my district and the state. I am writing to encourage parents, community leaders, political leaders, and other education stakeholders to let your school leaders know you would like our children to take a personal financial literacy course before they graduate. The survival of our communities depends on future generations being financially literate to help fight the cycle of generational poverty.