High Schools Add Personal Finance to Degree Requirements

by Dawn Handschuh, Personal Finance Writer   

With bankruptcies, foreclosures and credit card debt increasingly epidemic in many parts of the country, a growing number of states are making personal finance classes a required part of the public high school curriculum.

Until recently, only two states — Utah and Missouri — required students to complete a personal finance class to graduate. But changes are afoot. 

Tennessee became the most recent state to require a personal finance course as a prerequisite to high school graduation. Real-world topics covered will include income, money management, spending and credit, as well as saving and investing, according to the JumpStart Coalition for Personal Finance Literacy. While personal finance classes were previously available to Tennessee high school students as an elective, incoming ninth graders in the fall of 2009 (i.e., the class of 2013) will now be required to take and pass a personal finance course. (Tennessee has the highest bankruptcy-filing rate in the nation.) 

Indiana and Kansas are also considering new requirements for teaching personal finance from kindergarten through high school, while Ohio, Virginia, New Jersey and Colorado all plan or are now discussing whether to incorporate money management classes into the school curriculum. 

Depending on the school system, personal finance courses might include the ins and outs of mortgage loans, how to balance a checkbook, or how credit card finance rates are calculated. A greater number of schools, while not requiring personal finance as a stand-alone course, already integrate various personal finance concepts into other courses, such as math or economics.

Some criticism has been leveled at parents for failing to teach financial literacy at home at a time when school curriculums have moved away from teaching "basic living skills" courses and toward a greater focus on college preparatory classes, like science and math. And because there's only so much time in the school day, adding a personal finance prerequisite usually means that another requirement must be removed elsewhere.

Whether personal finance is required as a stand-alone course or as part of a broader focus in other subject areas, the current economic crisis — caused in part by consumers' lack of understanding of debt and credit risks — has spurred many to reconsider whether schools are adequately preparing students for the financial complexities of adulthood.