A solid financial education is one of the lawmakers’ and teachers’ best incentives for graduating high school students. Michigan will soon become the 14th state to mandate a personal finance course before students finish high school. Every graduating student from a public high school in the country should have to take at least one semester of basic personal finance. This, then requires students to have a personal finance class.
The Michigan House of Representatives recently enacted House Bill No. 5190 by a vote of 94-13. The bill passed the state’s Senate in May with a vote of 35-2. It then will be sent to Gov. Gretchen Whitmer for her to sign into law.
Move to Address Future Challenges Among High School Graduates
High school graduates will face several challenges in the future. It includes difficulty finding a job, paying bills and taxes, finding a decent living place, and managing credit cards, bank accounts, mortgages, student loans, and many more.
Some teenagers face these complexities even before they graduate to help provide for their families. Managing finances is a challenge at any age, but it’s tough for those who are starting. Even a little money lost to fees, interests, or bad investments can be crippling. In addition, a poor credit rating can affect a young person’s economic status for years.
Statistics show that 1 in 4 high school students are required to take a personal finance course before graduation. Next Gen Personal Finance is the group that assesses high school curriculums and advocates for all students to be taught primary money education by 2025.
The Current State
The situation is worse in many schools that are predominantly non-White and lower-income. Only 1 in 20 Black and Brown students have an opportunity to take a personal finance class before graduation unless they reside in a state that offers it to everyone, the organization found.
However, critics argue that this program is a “Band-Aid” solution. It hides the deeper problems in the U.S. financial industry, where lower-income families and people of color are often victims of high-fee products. And, in some instances, experience discrimination in accessing loans and other financial services.
Personal finance class is not an instant remedy. They should be implemented with efforts to reform the banking system to make it fairer for all. Giving young people a primary education in how the financial system works isn’t just about helping them avoid the worst options; it’s about assisting them in practical decision-making.
Likewise, those who say that all students need is a basic understanding of mathematics and compound interest seem immature. Being personal finance savvy these days is as essential to navigating paperwork and legal terms as it is about basic math.
Customers must choose between different bank accounts and fee structures, types of loans, as well as traditional banks versus non-bank services. The recent upswing in “buy now, pay later” options at many stores reminds us how quickly old ideas transform for the digital age that surprises the consumer. And then there’s the rising popularity of bitcoin and cryptocurrencies that are equally attractive to younger generations.
Conclusion
Indeed, Michigan’s bill underscores how this is a rare case that needs cooperation between both parties. It is worth noting that Virginia is one of the best states promoting personal finance training, Next Gen Personal Finance shared. Maryland is ranked in the middle, but sadly D.C. is ranked 49th. Personal finance should be as core to high school education as Shakespeare and algebra.
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