Assemblymember Kevin McCarty (D-Sacramento) has introduced a bill to guarantee personal finance education for all California high school students.
He is being applauded by educators like Learn4Life public charter high schools, which has been teaching financial literacy to its students for the past eight years. Just 25 states mandate financial classes and only a few more require them to be available as elective courses.
High school graduates with financial education are less likely to fall prey to high-cost predatory loans (such as payday loans) than their peers without financial instruction. They are 21 percent less likely to carry a balance on a credit card while in college, and they apply for federal aid and subsidized student loans more often.
Learn4Life students learn to prioritize spending based on needs versus wants, how to read a paystub with withholdings and deductions, and they discover the beauty of compound interest when they are saving money, and the dark side of that when they are borrowing.
Financial education is essential for students of all socioeconomic levels. Of the 63 million adults who don’t have a bank account, most are from low-income households, have less education or are in a racial or ethnic minority group. These “unbanked” individuals pay fees to cash their paychecks, purchase money orders or use a prepaid credit card.
Our teachers see a trickle-up of financial knowledge when our students learn how to be fiscally responsible. They pass on the knowledge to their parents and siblings which helps the entire family be better off financially.
Learn4Life student Roxeanna is on a path to financial literacy by building credit and getting a good job. She learned how to budget, create a financial plan and save money.