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Should Financial Literacy Be Taught in More Schools?

Anyone who’s ever struggled with a difficult class in high school has asked the question, “Will I ever actually use this stuff after I graduate?”

After graduation, students probably won’t dissect a frog or need to remember what E stands for in E=mc2 on a daily basis. But one thing’s for sure: They will need to know how to handle money wisely—and the sooner the better!

That’s why we’re such huge fans of teaching financial literacy in schools.

What Is Financial Literacy?

Financial literacy classes teach students the basics of money management: budgeting, saving, debt, investing, giving and more. That knowledge lays a foundation for students to build strong money habits early on and avoid many of the mistakes that lead to lifelong money struggles.

Why We Think a Financial Literacy Class Belongs in High Schools

As a country, we’ve seen where not having a financial literacy curriculum can lead. Millions of Americans struggle every day with their money. At least 78% of people are living paycheck to paycheck, often turning to their credit cards to make ends meet.1 Yikes! So it’s no surprise that 71% of people are burdened by debt and assume it’s a normal part of life.2

Beyond that, many Americans are finding that they can’t buy homes, invest for retirement, or save for their kids’ college funds because of their own student loan debt, massive car payments, and lack of financial planning. People are deep in debt and short on hope.

But it doesn’t have to be that way! A lot of the money problems Americans are facing could’ve been avoided if financial literacy was taught in school. That’s why we think more schools should offer financial literacy courses as part of their graduation requirements.

Financial Literacy Courses Help Students Build Habits to Win With Money

So, what are the advantages of learning money principles as astudent rather than as an adult? Well, students who take a financial literacy course early have the most time to apply what they know. And many financial literacy students apply what they learn right away—while they’re still in high school.

For example, according to a survey conducted by our Ramsey Solutions Research Team in 2016, nearly two out of three high school students who had taken a personal finance course reported that they were already earning an average of $3,000 a year.

A high majority of the same group said they were in the habit of creating monthly budgets for their money. And 20% already owned a car they paid for themselves! That’s why the basics of personal finance should be taught in high schools everywhere, right alongside other basics like reading and math.

What Is Taught in a Financial Literacy Curriculum?

It’s important to empower the next generation and teach them to handle their money wisely. We want our kids to beat the debt statistics! But practically speaking, how do we make that happen?

Thankfully, personal finance is 20% knowledge and 80% behavior. So while it’s important that a financial literacy course teaches money lessons, it’s more important to give students an actionable plan to manage their personal finances. The Five Foundations are exactly that: a simple plan designed to help students confidently handle their finances. Here’s how it works:

The First Foundation: Save a $500 emergency fund.

The first thing students should do is set aside money for emergencies. Financial emergencies like a lost cell phone or a flat tire could put students into debt if they don’t have any money set aside. But big problems become minor inconveniences when they have an emergency fund in place.

The Second Foundation: Get out and stay out of debt.

Debt is dumb! It’s a huge financial burden that way too many people carry. Cash-back rewards, airline points, minimum monthly payments and zero down—they’re empty promises. Our financial literacy class teaches students the ways debt traps them and how to break free ASAP.

The Third Foundation: Pay cash for your car.

New cars are only worth 40% of their purchase price after just five years.3 Paying the monthly minimum—plus interest—on something that’s losing value isn’t a good investment. A student’s best bet is to buy a good used car and pay cash. Yup, it’s possible! It takes planning ahead and saving up over time, but it’s way better than throwing an average of $563 a month at the “new” car they bought a year ago.4 It probably doesn’t smell so new anymore!

The Fourth Foundation: Pay cash for college.

The student loan crisis in America is out of control. Our nation’s outstanding student loan debt is at $1.56 trillion.5 Trillion! Today’s grads are delaying marriage and not saving for retirement. Plus, they can’t even move out of their parents’ homes because of the chains of their past—debt.6 Students who pay for college with cash, on the other hand, step freely into the next chapter of life.

The Fifth Foundation: Build wealth and give.

Now for the super fun part! Students who live debt-free and are disciplined about saving money can really live and give like no one else. This takes time, patience and a little bit of compound interest. But imagine the life-change that happens when money is no longer a worry. Instead of being consumed by financial stress and fear, they can enjoy their money and spend their time thinking of ways to give to others.


Are you a teacher? Help your students win with money today!

When a student is financially literate, they don’t just make smart decisions with their money. They build good habits that trickle down to their families, their communities, and eventually, the nation. That’s a trend that will change the toxic money culture and create a new normal. And it happens one student at a time.

Think about the jump start your child could get on life if they were already budgeting, saving regularly and spending wisely—before they graduate! They could have thousands of dollars in the bank, a paid-for car, and the beginnings of a retirement fund.

And that’s not just a dream! Every year, thousands of students learn financial literacy skills through our Foundations in Personal Finance curriculum. They discover the tools they need to build a lifetime of success with money.  Foundations simplifies big topics like insurance, taxes, real estate and the global economy so students can feel confident stepping into the next chapter of their lives.

Life-Changing Personal Finance Curriculum

Teach your high school students the money skills they’ll use now and for the rest of their lives with Foundations in Personal Finance. And this month, Foundations will be available in Spanish for the first time ever!

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Ramsey Solutions

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Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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