As the economy threatens to slip back into recession, more Americans are worrying about their personal finances. Decision makers in some states are placing a greater emphasis on personal finance education at the high school level—and some schools even require financial literacy classes for graduation.
Four states—Utah, Missouri, Tennessee, and Virginia—require high school students to take a one-semester course devoted to personal finance. In Virginia, this year's high school freshmen will be the first students who must take the class. Twenty other states require that personal finance instruction be incorporated into other subjects, such as math or home economics.
Other states are trying to make it easier for students to fit personal finance classes into their schedule. In Michigan, for example, a personal finance class counts as a math credit. Eight other states require that high schools offer a personal finance class, although they do not require students to take it.
Laura Levine, executive director of the Jump$tart Coalition, an organization that supports financial literacy efforts in 48 states and Washington, D.C., says semester-long classes are a good start, but that students need to learn about personal finance over a longer period of time.
"One semester is not going to teach a student everything that they're ever going to need to know," she says. Although an Ohio State University study showed that personal finance classes help college students more than they help high school students, Levine says it's important that schools start teaching students about money earlier. "Not everyone graduates high school—and statistically, those kids will earn lower wages. We're missing some of the kids that need this the most."
There is student demand for personal finance classes, according to the 2011 Teens & Money Survey conducted by investment firm Charles Schwab. Among 16-to-18-year-olds surveyed, 86 percent said they would rather learn about money management in a class than make financial mistakes in the real world.
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But they may have learned by observing their parents' economic woes; 93 percent said their family was impacted by the recession, and many said they have learned important economic lessons as a result of the recession. More than half said they learned it's important to have emergency savings and to understand the consequences of borrowing money.
More than three quarters of students surveyed by Charles Schwab said they are knowledgeable about money management, but just 52 percent of students have a savings account.
Meanwhile, some unique private-public partnerships at high schools give students the chance to open their first account without even leaving their schools. For-profit banks such as Capital One have opened branches inside high schools. Students serve as tellers, employees, and customers. According to the Credit Union National Association, there are at least 250 nonprofit credit unions operating out of American schools.
Levine, of Jump$tart, says in-school banks, stock market games, and financial simulations are gaining popularity in schools. "It's important that schools are giving kids a real-world application [for] what they've learned," she says.