Required personal finance course

The following is excerpted from “The Way to Wealth,” an essay by Benjamin Franklin first published in 1758 as the preface to his Poor Richard's Almanack. In it, a character named Father Abraham gives advice to a crowd waiting for an auction of fine goods to begin, quoting sayings from Franklin's almanacs. A 'mickle' is a large amount.

You may think perhaps, that a little tea, or a little punch now and then, diet a little more costly, clothes a little finer, and a little entertainment now and then, can be no great matter; but remember, "Many a little makes a mickle." Beware of little expences; "A small leak will sink a great ship," as Poor Richard says; […]

But what madness it must be to run in debt for these superfluities? We are offered, by the terms of this sale, six months credit; and that, perhaps, has induced some of us to attend it, because we cannot spare the ready money, and hope now to be fine without it. But, ah! think what you do when you run in debt; you give to another power over your liberty […]

The following is excerpted from an article in which a high school economics teacher describes his former students, published in a state education journal.

Every spring, former students email me from college with the same kind of question. One signed up for a credit card at orientation to get a free T-shirt and now owes $1,900 at 27 percent interest. Another didn't know that her unsubsidized student loan was charging interest while she was still in school. These are not careless students. They are students who were never taught.

We require four years of English because adults need to read and write. Every adult also has to sign a lease, read a pay stub, file taxes and decide whether to borrow. A semester of personal finance is not a luxury; it is the one class that every single student will use, whether they go to college, join the military or start work the week after graduation.

The following is excerpted from a column by a researcher who studies consumer behavior.

Few people oppose teaching teenagers about money. The harder question is whether a course changes what they do years later, when they are actually choosing a car loan or a credit card. Here the research is less encouraging than the headlines. A widely cited 2014 review of more than 200 studies found that financial education had only small effects on later financial behavior, and that those effects faded with time. A 2022 review of 76 randomized experiments was more hopeful, finding real effects on both knowledge and behavior, though the effects on behavior were smaller.

The lesson is not that personal finance classes are worthless. It is that knowledge learned at sixteen is often gone by twenty-six. Financial education seems to work best when it arrives 'just in time,' close to a real decision. A required semester may help, but no one should expect it to protect young adults on its own.

The following is excerpted from a letter to a state legislator from a high school counselor.

I don't doubt that personal finance matters. My concern is the schedule. Students have room for only so many courses in four years. When the state adds a required semester, something else comes out, and in practice it is usually an elective: a second year of a world language, an art class, a computer science course, a semester of band. For a student trying to complete an AP sequence or a career program, a new requirement can mean dropping the class that made them want to come to school.

If the state wants every student to learn personal finance, it should consider building those lessons into courses students already take, such as math, economics, even English, rather than adding another box to check.