Why Financial Literacy Should Be a Core Subject in Schools

Financial literacy is becoming an increasingly important skill in today's world. However, not all students have the opportunity to learn about it during their schooling years. In some areas, financial literacy is integrated into existing classes like Economics and Personal Finance, while in others, it may not even be a subject at all. This article explores why financial literacy education is crucial and why it often remains a missing component in school curriculums.

Financial Literacy in Schools: The Case of North Carolina

A notable exception is North Carolina, where financial literacy is indeed taught in school. In North Carolina, to graduate from high school, students must pass both Economics and Personal Finance. I was one of the social studies teachers who helped write the standards for these courses. My experience teaching at the middle school level has allowed me to develop a Personal Finance course that provides a crucial foundation for high school students. Despite this, there are still many regions where financial literacy remains an afterthought or is entirely absent from the curriculum.

The Supply and Demand Issue in Education

One of the major reasons why financial literacy is not widely taught in schools is the severe teacher shortage that is driven by low pay and a lack of respect for educators. This shortage is particularly pronounced in the field of social studies and economics, which are areas where financial literacy is typically taught. From a financial literacy perspective, this shortage can be seen as a result of supply and demand. Schools and districts are simply unable to attract and retain enough qualified teachers due to the current economic conditions.

Financial Literacy in High School Curriculum

Even in areas where financial literacy is not explicitly taught, its concepts are often embedded in other subjects. In my high school, for example, all freshmen were required to take a class called “ELPSA,” which stood for “Economic Legal and Political Systems in Action.” The basics of financial literacy were integrated into this course, providing students with a fundamental understanding of personal finance. Similar approaches have been observed in other regions, where financial literacy is taught through economics and social studies classes.

Interactive Learning Through Stock Simulations

Another way financial literacy is taught is through interactive learning exercises. For instance, during my time at a high school in suburban Chicago, freshmen participated in a mock stock market simulation. Each student received a budget to invest in hypothetical stocks. At the end of the year, the student who made the most pretend money was awarded a real dollar bill as a prize. This competition not only made the lesson fun and engaging but also instilled valuable lessons about investing and financial decision-making. Such activities make financial literacy more tangible and relevant to students.

The fact that some students claim they were never taught certain topics in school can often be attributed to their own inattentiveness or lack of engagement. Nevertheless, the integration of financial literacy into core subjects can significantly enhance students' understanding and appreciation of personal finance.

Conclusion

Financial literacy is a vital skill for navigating the modern world. While some schools and regions have made it a core subject, others lag behind. The shortage of qualified teachers in fields like economics and social studies compounds this issue. By addressing these challenges and integrating financial literacy into the curriculum, schools can better prepare students for the financial realities they will face in adult life.

Keywords: financial literacy, personal finance education, school curriculum