The California Personal Finance Education Initiative aims to equip students with financial literacy before college or the workforce.
The California Personal Finance Education Initiative could be on voters' ballots this fall with the goal of requiring financial education in the state's high schools. The initiative requires students to take an independent personal finance course as a requirement for graduation, with the goal of equipping students with essential money management skills that will carry them into the workforce.
Like Alaska, Wyoming, and Washington, D.C., California does not require you to take a financial literacy course before graduation. While many supporters of the bill argue that such classes will help students make informed financial decisions before college or the workforce, opponents say high school students simply don't care. They claim that they will not.
“If high school students care about the course, that's the way it should be.” [a personal finance] course. It directly impacts their lives… After all, if you're learning algebra, you should definitely learn personal finance.it is [for] the rest of your life,” said junior art history major Wyatt Tootaker. “When you graduate high school, enter the workforce, or go to college, you become more and more independent and self-reliant. When that process happens, if you don't know, [personal finance]then you will be left behind.
Tootaker said he took a math course in high school that focused on personal finance, but it was little more than equations and formulas and lacked depth from a conceptual standpoint. This limitation may be due to the framework set by the California State Board of Education (SBE). The SBE says he supports two national standards, allowing teachers to incorporate optional curriculum into other core subjects as needed, and that “mathematics courses should focus on financial literacy exercises and skills integration.” It is often considered a natural fit.”
The SBE also allows schools to offer financial literacy as an elective in ninth grade. However, the American Foundation for Public Education says that 9th grade is not the most ideal time to offer this course, giving California a “D” on its 2023 National Report Card on Financial Literacy. ing.
“Time is one of the secret ingredients in personal finance. The more time you have to grow your money, and therefore the more time you have to invest, the better your results will be. It can be done,” said Eric Young, senior lecturer in economics. “I think having financial literacy in high school can prevent some kids from making terrible mistakes. The sooner you start doing something, the faster you can get on the learning curve.” The more you reach, the better you will do.”
Young currently teaches ECON 3660 Personal Finance at LMU. This course focuses on evaluating and understanding decision-making in consumer finance. Mr. Young emphasized the importance of starting financial literacy education early and encouraged students of all ages to take personal finance courses. ECON 3660 falls under the University's Economics Department and a student must take ECON 1050 Introduction to Economics to be eligible to take the course. This means students must commit to taking both classes, which can take up space in their course schedule.
The American Foundation for Public Education gave California a “D” on its 2023 National Report Card on Financial Literacy.
“Everything in life, including academics, is a trade-off. If you offer Class A, you're sacrificing the opportunity to learn the content of Classes B, C, and D,” Young said. “The question every student should ask is… [is if] Benefits of taking this type of class [is] greater than the cost. It is unique to every student. ”
For some students, the cost is even higher. “We used to actually require finance majors at LMU to take a personal finance class. That’s no longer necessary…It’s because we go to college to find a job, we don’t have a personal finance class. Because it's not about learning about finance. What Personal Finance was doing was making you less competitive in the job market as a graduate,” said Owen Brunner, an introductory finance major. “When we come to college, we come to college to find jobs. I'm here to find the best job possible.”
But Young argues that when thinking about the future of students entering the workforce, it is precisely the future that college students need to be thinking about, while high school students do not. If high school students fail to develop productive money management habits at a young age, it will be much harder to break those negative habits in their future careers, Young said.
“If I had waited until I was in my 30s or 40s, [managing money], you've already accumulated bad habits and it can be very difficult to break them… How taxes work and how taxes work when you get your first “real job” It's probably a good idea to know a little about. An IRA or 401k plan will work,” Young said. “If you have that knowledge when you're 21 or 22, as opposed to when you're 31, you can get a 'real job.' [or] 32 — 10 years head start. ”
While this advice works well for college students who have four more years to enter the professional world after high school, it doesn't answer the personal financial education question for students entering the workforce immediately. “What happens to high school students who graduate without personal finance knowledge and don’t go to college? How do we close that gap? [For] Many people's first exposure to finance comes when they major in business in college. I think that could be a problem,” Tootaker said.
To combat this gap, California created the CalMoneySmart Grant program in 2019, which, according to its website, “provides financial education and financial empowerment programs to unbanked and underbanked Californians.” It will provide grants of up to $200,000 annually to nonprofit organizations that provide services. , not all students have this formal education, and without it, some students may turn to other, less reliable resources.
LMU offers Personal Finance as a business elective, but students must first take Introduction to Economics as a prerequisite.
“Almost every student has access to information, but do they have the right filters to determine if that information is useful?” Young said. “So if it comes from an established textbook or a vetted source, it’s going to be much more reliable than your cousin. [telling] I mean he saw it on a TikTok video. ”
Tootaker shared similar concerns about online misinformation, saying that much of the information younger generations receive is through social media. “If you're getting a significant portion of your news from social media (such as TikTok), there can be inconsistencies. There are a lot of 'get rich quick' strategies on social media that don't really work.” There are misconceptions about how to earn and save money. Unless it’s taught at home, it’s hard to find it elsewhere,” Tootaker said.
Regardless of their position on whether requiring personal finance courses for high school students is beneficial for the future, Tootaker, Brunner, and Young all agree. If students want to gain financial literacy, there are many online resources to help them do so. . “We're at the point where you can learn anything. With the Internet and free online resources at your disposal, you can become an expert at anything. Unless you have the desire, it's actually too easy.” said Mr. Brunner.
“[Personal finance] It's not advanced physics or rocket science. “It's a very simple set of principles, and if you start applying them as young as possible, you'll get better at it,” Young said. “You don't want to overcomplicate financial literacy… Don't overcomplicate it. Read some books. Find smart people you trust. Ask them a few questions and do it. please.”
