24 states don't require personal finance education — and it cost you $1,389 last year

Financial illiteracy cost the average person $1,389 in 2021, according to a recent survey from the National Financial Educators Council

Sam Becker

By 

Sam Becker

Sam Becker

Contributing Reporter

Sam Becker is a contributing reporter at Policygenius, where he covers personal finance and insurance news. Previously, he was a senior writer at CNBC, and his writing has appeared in Business Insider, Fortune, Curbed, and elsewhere.

Published March 28, 2022 | 4 min read

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What you don’t know can cost you. And last year, a lack of financial knowledge cost Americans a lot. Financial illiteracy cost the average person $1,389 in 2021, according to a recent survey from the National Financial Educators Council. 

Roughly half of America does not receive any (or much) formal financial education at school. Personal finance and economics education, in one shape or another, is only required in 24 states, according to a recent analysis (though not recent enough include the news that Florida passed a law requiring personal finance education [1] ) from the Council for Economic Education, a nonprofit advocacy group.

That study, which delves into the state of economic and financial education in K-12 classrooms in each state, shows there has been recent momentum among states to incorporate personal finance education into the curriculum, but by and large, the U.S. is still severely lacking in options and accessibility for public school students.

“Access is a big thing in this country, especially for economic and financial education,” says Nan Morrison, president and CEO of the Council for Economic Education. “If we don’t guarantee [personal finance] classes, the kids who lose the most are the ones that have the least natural access to knowledge and opportunities. That’s shameful.”

The big question, then, is why access to personal finance education is still a no-go in half of U.S. states.

‘There’s no sense of urgency’

One of the primary reasons many schools lack mandated personal finance and economics classes is a lack of resources. Because school funding is so disparate based on geography, not every district has the funding or instructors to meet their current instructional requirements, let alone add new ones.

“Resources and instructors are a big hang-up,” says Jedidiah Collins, a financial educator who runs Money Vehicle, a financial literacy learning platform. “It's been a huge challenge to bring financial education into the classroom because there haven’t been resources to support it. And another problem is that teachers often aren’t subject matter experts on money.”

That’s a point that Morrison echoes.

“Teachers don’t know how to teach the material either, because they’re not trained to,” she says. “You wouldn’t send a French teacher in to teach calculus.” Without proper priming for teachers, many don’t feel that they can adequately teach the material.

Collins adds that colleges don’t often require financial education, so high schools don’t make it a priority.

“Personal finance classes don’t fit in the pre-college preparatory curriculum,” he says. 

As a result, the only public school students that typically take personal finance classes are those in states where it’s been mandated.

“Until it’s mandated in your state,” Collins says, “there’s no sense of urgency to teach it.”

The hang-ups: resources & instructors

That lack of urgency is having a profound effect on American students well after they graduate, too.

Robert Fortune, a financial adviser at New York-based Fortune Advisory Services says that the lack of any sort of formal education is obvious when he meets with clients. 

“There’s a lack of understanding about money in general,” says Fortune, who also teaches personal finance classes and workshops in local schools. “Mostly, clients have problems budgeting and understanding their income versus their spending habits, and how that correlates to end-goals in the future.” 

Fortune would like to see schools implement a basic financial skills course that focuses on a handful of key tenets: budgeting, using credit, investing, and insurance. That, he believes, will give most people a foundational understanding of money, while also empowering them to make better financial choices.

“For schools, if you’re really trying to foster a change in the community that you’re serving, financial literacy is something that’s going to be extremely important,” he says. 

Morrison agrees and says that while we may have traditionally relied on parents and family members to teach kids about money, the need for the education system to step in has become more apparent than ever. If parents don’t teach their kids the basic tenets of finance — such as the importance of proper budgeting, the basics of using credit, investing, and even insurance — they often run into problems as they enter adulthood, and start interacting with the financial system.

For example, many young people, who may not understand how basic financial products and services work, may quickly find themselves in debt, hurting their credit scores, or otherwise putting them in a tough financial spot that can hamstring them in the years ahead.

“If you come from a home where money wasn’t discussed, or there weren’t sufficient resources, you’re at a disadvantage,” Morrison says.

Image: Catherine Falls Commercial / Getty Images