Why Financial Literacy is Not Taught in Schools (And How We Can Change That)
In today’s complex financial landscape, the need for financial literacy has never been more urgent. From managing student loans to understanding credit, making informed financial decisions is a crucial skill set. However, despite its importance, financial literacy is not a mandatory subject in many schools across the United States. This raises several questions: Why is financial literacy not taught in schools? And more importantly, how can we change that?
This article explores the reasons behind the absence of financial literacy in the educational system, examines its impact on students, and discusses how educators, policymakers, and communities can push for change.
Why is Financial Literacy Not Taught in Schools?
Despite the clear need for financial education, several barriers prevent it from being a required part of the school curriculum. Understanding these challenges is the first step toward advocating for its inclusion.
1. Overcrowded Curriculum
One of the most common reasons why financial literacy is not taught in schools is that the existing curriculum is already overloaded. Schools face increasing pressure to meet standardized testing requirements, prepare students for college and careers, and cover subjects like math, science, and English. Adding another subject—especially one not mandated by federal education standards—can seem overwhelming to both administrators and educators.
This overcrowding of the curriculum makes it difficult for financial literacy to gain a foothold, even though the benefits are clear. Many schools lack the resources, time, or staff to implement an additional course.
2. Lack of Qualified Teachers
Another significant hurdle is the shortage of teachers who are qualified to teach financial literacy. Many educators do not feel confident teaching subjects related to personal finance, either because they lack training in this area or because they themselves were never taught these essential skills. Without well-trained teachers, financial literacy lessons can be less effective or omitted altogether from the school day.
3. No National Mandate
Perhaps one of the biggest obstacles is the lack of a national mandate for financial literacy education. Unlike math or science, financial literacy is not required by the federal government, leaving it up to individual states and school districts to decide whether or not to include it in their curricula. As a result, financial literacy is often overlooked or deemed optional, rather than essential.
Currently, only 21 states in the U.S. require high school students to take a financial literacy course before graduating. This leaves millions of students unprepared to handle basic financial challenges like managing credit, understanding taxes, or creating a budget.
4. Financial Literacy Isn’t Tested
Subjects that appear on standardized tests are often prioritized, as they are tied to funding and school rankings. Financial literacy, however, is not typically included in these assessments, which decreases the likelihood of it being emphasized within the classroom. Without pressure from testing authorities, schools often focus their resources on subjects that are considered critical to students’ academic success.
Should Schools Teach Financial Literacy?
The short answer is yes, schools should teach financial literacy. But to make the case for financial literacy in schools even stronger, it’s important to examine the potential benefits and the real-world impact of financial education on students’ lives.
1. Preparing Students for the Real World
Financial literacy is essential for navigating life beyond school. Students will inevitably face decisions about credit cards, loans, mortgages, taxes, and investments. Without a solid understanding of how these systems work, they are at risk of making poor financial decisions that could have lasting consequences. Teaching financial literacy gives students the tools they need to avoid falling into debt, save for the future, and build financial security.
2. Addressing Economic Inequality
Financial literacy is also crucial for addressing systemic economic inequality. Many students—particularly those from low-income households—do not have access to financial education at home. Schools provide an equal opportunity for all students to learn these essential skills. By implementing financial literacy education across all schools, we can help close the wealth gap and create more financially literate communities.
3. Encouraging Healthy Financial Habits
Early exposure to financial literacy encourages students to develop responsible financial habits that last a lifetime. For example, they learn how to create and stick to a budget, the importance of saving regularly, and how to manage credit responsibly. These habits are foundational to financial well-being and can set young people on a path to long-term success.
4. Increasing Financial Independence
Financially literate students are more likely to make informed decisions about their future, such as whether to take on student loans, how to manage debt, and how to plan for retirement. By understanding financial literacy terms such as “compound interest” and “credit score,” students gain the knowledge they need to achieve financial independence.
How Many States Require Financial Literacy in High School?
As of 2024, 21 states in the U.S. require financial literacy courses for high school graduation, according to financial literacy statistics for 2024. These states include Florida, Alabama, Tennessee, and Virginia, among others. However, this leaves a significant portion of the country—nearly 30 states—where financial literacy is not required in high school.
The states that do require financial literacy courses have seen positive results, with students showing greater confidence in managing money and a deeper understanding of financial concepts. For example, in Alabama, where financial literacy has been mandatory since 2013, students report feeling more prepared to handle personal finances than their peers in states without such requirements.
But while progress has been made, the fact remains that a majority of students are still graduating without this crucial education. This lack of financial preparation puts them at a disadvantage as they enter adulthood and begin making critical financial decisions.
Why Financial Literacy Should Be Taught in Schools
The case for teaching financial literacy in schools is compelling. Not only does it prepare students for life’s financial challenges, but it also fosters a generation of informed, empowered individuals who are capable of making smart financial decisions. Here are a few key reasons why financial literacy should be taught in schools:
1. Financial Education is a Lifelong Skill
Unlike many subjects that students may never use again after graduation, financial literacy is a lifelong skill that everyone needs. Whether managing a personal budget, buying a home, or saving for retirement, financial literacy plays a central role in almost every aspect of adult life. By teaching financial literacy in schools, we ensure that students are prepared to handle these real-world responsibilities.
2. Reducing the Student Debt Crisis
The student debt crisis in the U.S. is a direct result of students not understanding how loans work, how interest accumulates, or how repayment schedules impact their future finances. If students learned about debt management and loan options in school, they would be better equipped to make informed decisions about borrowing for college. This knowledge could help prevent them from taking on more debt than they can manage.
3. Creating Financially Stable Communities
When students graduate with a solid understanding of financial concepts, they are more likely to contribute to financially stable communities. They are better prepared to manage their own finances, invest in their future, and avoid falling into the traps of high-interest loans or credit card debt. Financially literate citizens contribute to a stronger economy and healthier communities overall.
4. Bridging the Financial Knowledge Gap
As mentioned earlier, financial literacy can help close the wealth gap by providing all students, regardless of background, with access to the knowledge and tools they need to succeed financially. By making financial literacy education universal, schools can help bridge the knowledge gap that disproportionately affects low-income students and communities.
How to Advocate for Financial Literacy in Schools
Given the clear benefits of financial literacy, how can we push for it to become a standard part of the school curriculum?
1. Encourage State-Level Legislation
One of the most effective ways to advocate for financial literacy is by supporting state-level legislation that mandates financial education in schools. You can reach out to your local representatives, participate in advocacy campaigns, and raise awareness about the importance of financial literacy for youth. As more states recognize the value of financial education, we can hope to see more widespread implementation of these programs.
2. Partner with Organizations
Nonprofits and community organizations that focus on financial literacy, like Cobb Global Outreach Inc., are essential allies in this effort. By partnering with these organizations, schools can gain access to resources, curriculum materials, and financial literacy speakers who can help deliver high-quality financial education to students.
3. Offer Financial Literacy Resources to Schools
Providing schools with financial literacy PDFs, books, and interactive resources can make it easier for educators to integrate these lessons into their existing curriculum. Many teachers are eager to teach financial literacy but need access to practical, user-friendly materials.
4. Involve Parents and the Community
Parents and communities play a vital role in advocating for financial literacy in schools. By expressing interest in financial education and supporting efforts to introduce financial literacy programs, parents can help ensure that their children—and future generations—are better equipped to manage their finances.
Key Takeaway: The Path Forward for Financial Literacy in Schools
The question of why financial literacy is not taught in schools is a complex one, but the solution is clear: financial literacy should be an essential part of every student’s education. By addressing the challenges that prevent its inclusion in the curriculum and advocating for change at the local and state levels, we can ensure that future generations are equipped with the financial skills they need to succeed.
The time to act is now. Financial literacy can no longer be optional—it is a necessity for preparing students to navigate the financial challenges of the modern world. Through collective effort, we can bring financial literacy to every classroom and help build a more financially secure future for all.
