This reality has prompted some to wonder whether students are learning enough about how to manage money. According to the Center for Financial Literacy at Champlain College, they're not.
In 2017, the center gave 27 states a grade of C, D or F on “their efforts to produce financially literate high school graduates.” Only five states received an A: Alabama, Missouri, Tennessee, Utah and Virginia.
When it comes to middle school, only 28 states have recommended financial literacy standards, according to a Brookings report, but many allow localities to decide how to implement such standards.
Recently, several states have made financial literacy lessons more of a priority for students even before they're old enough to get a job.
In November 2017, then-Wisconsin Gov. Scott Walker signed a bill requiring school districts to incorporate personal finance into kindergarten through 12th grade instruction. Last year, Iowa and Kentucky made completion of a financial literacy class a graduation requirement. This month, New Jersey Lt. Gov. Sheila Oliver signed a bill mandating school districts to integrate financial literacy into every year of middle school. Lessons will cover topics like investing, credit cards, managing debt and budgeting.
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New Jersey Assemblywoman Angela McKnight, a primary sponsor of the bill, says she became interested in the subject after speaking with people on the campaign trail about their financial hardships.“One of the main issues they were facing was debt: How can they get out of debt? How can they pay their bills?” she says. “Especially millennials, who have so much debt with college.”
McKnight reached out to local financial expert Tiffany Aliche, known professionally as “The Budgetnista,” to discuss ways to expose students to money management at a younger age. Before she took on her current role, Aliche was a teacher for more than a decade and often incorporated finance into activities -- even for preschool students.
“If we did an art project, for example, I might have the kids make a savings box. The kids would cut out things they wanted to save for and put it on their box,” Aliche says. “For reading, I always made sure that a percentage of the books I ordered spoke to concepts about sharing, about donating, about spending.”
The first version of the bill included requirements for kindergarten through eighth grade, but it was pocket vetoed by Gov. Chris Christie during his final weeks in office. The latest version was changed to focus on sixth through eighth grades, McKnight says, due to a collective desire to focus on middle school students.
During her discussions with teachers, school officials and community members, she says, some raised questions about the appropriate age for kids to begin learning about what can be a complicated subject. Others wondered about the cost to create a new course and whether the new standards could further overwhelm teachers.
Aliche insists that teachers do not need a degree in finance to teach effective lessons, and she encourages them to introduce the topic in subjects students are already learning. McKnight and Aliche expect costs for implementing the new law to be low by taking advantage of resources in the community and on the internet.
Utah State Treasurer David Damschen says he understands the potential challenges states can face with allocating money or providing resources for personal finance lessons. Utah was the only state to receive an A+ in Champlain’s report, but Damschen believes even his state has room for improvement. Funding for such programs is "inadequate," he says, and changing the education culture to consistently and effectively embrace financial literacy as a necessary curriculum subject can be difficult.
Damschen recommends that states or school districts interested in more rigorous courses find teachers who are not only qualified to teach financial literacy but who are passionate about it.
“It’s about developing a level of support for this issue,” says Damschen. “This is not just a passing phase. We need to drive that down into the districts, and the teachers and the students.”
McKnight agrees. Despite this month's victory, she still plans to push for a similar policy for students as early as kindergarten.
