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Financial Literacy: Should High School Students Have to Learn This?

Sierra Norford (left) and Tammi Beatti teach personal finance at Montpelier High School. Photo by Mary Cole Mello.
“We would not allow a young person to get in the driver’s seat of a car without requiring driver’s education, and yet we allow our youths to enter the complex financial world without any related education.”

—John Pelletier, Director of the Center for Financial Literacy, Champlain College
Managing money may have been simpler in 1950. For one thing, you didn’t have to dread the arrival of credit card bills every month. Unless you had an impeccable credit history and could obtain a Diners Club card, you didn’t have any credit cards at all. You probably paid in cash or, if you really had to have that 16-inch television set, you might buy it on the installment plan. There were also “charge cards “ issued by a store which could only be used at that store and the bill had to be paid in full by the end of the month. 

There were no 401(k)s or 403(b)s in those days, but if you were lucky, you could stay with the same employer until the day you retired and then go home to wait for your pension check and, maybe, a Social Security payment. 

Contrast that with today’s young adult, who gets enticed to snap up new credit card offers with interest rates over 20%. Not surprisingly, the total credit card debt carried by Americans at the end of 2023 was $1,079 trillion. And credit card debt is only a fraction of the money Americans owe. 

It’s a confusing world for new graduates who may be stunned to learn they should begin saving for their retirement even while they’re juggling tuition loan payments. Many of them have yet to learn about compound interest, credit scores, Roth IRAs, CDs, mutual funds, APRs, APYs, and the simplified, but still scary, 1040. 

Experts like John Pelletier stress that young adults must be financially literate.

“Every day after they graduate they’re going to be thinking about money. How to make it. How to spend it. How to invest it. How to save it,” he notes. Among other things, learning about financial planning can help many families escape from the cycle of poverty. 

Classes in personal finance are now a graduation requirement in half of U.S. states. Vermont isn’t one of them. 

According to an article in Seven Days (March 2023), only 11 of the state’s 55 high schools require courses related to financial literacy. About 28 offer them as an elective and, in 16 high schools, there are no stand-alone finance courses, although the topic might be addressed during other courses. 

Montpelier High School offers two finance courses as electives. Sierra Norford teaches Personal Finance/Living on Your Own, which is designed to help kids get ready to deal with the world of rents, mortgages, budgeting, and credit card payments. 

“It can be hard for some of them to wrap their heads around all of this,“ she says. Her students practice budgeting with assigned incomes. When faced with limits, she encourages them to think creatively. “If they can’t figure out how to buy a car … how about taking the bus for a while? We talk about credit card limits and compare credit cards.” Norford notes that students have come back after graduation to ask for a copy of the budget she taught in class.

Tammi Beattie teaches Personal Finance/Invest in Yourself, a course that begins with discussions about college and career options and goes on to cover investing, insurance, taxes, financial aid for college, and even retirement planning. 

“The math isn’t hard,” says Beattie, “But the language is.”

During her course, students practice filling in tax forms and learn about investment opportunities they can take advantage of while they’re still in high school. 

Both teachers seem to receive a lot of appreciation. “This is the most valuable course I’ve ever taken,” said one student. Another was eager to tell her teacher how “cool” it felt to open a Roth IRA.

A poll conducted by Champlain College’s Center for Financial Literacy revealed that 80% of Vermonters believe high school graduates should have the kind of training Norford and Beattie provide. If a proposed bill, H.228, passes this year, every high school student will soon be required to complete a finance course before they graduate.

It could be a tough sell.

Vermont school boards cherish their independence and may consider any mandate to be one foot on a slippery slope.

More significantly, passage of the bill will cost us. If every one of Vermont’s high school students must take at least one of these courses, extra staff will be needed. Vermonters are already wringing their hands about property tax bills. It’s entirely possible that soaring school budgets might make it impossible for all of Vermont’s high school students to receive an education in money management, a lesson that might work well in a financial literacy class.