Last week, the Florida State Senate and House of Representatives unanimously passed a bill that will make it the latest and largest state to mandate personal finance education for high school students as a prerequisite to graduation. It’s no secret that the current standing of financial education in America has a long way to go, but recognizing the importance of educating high school students by making any financial education a requirement is a great start. But at what point in life is financial education the most beneficial?
Who Benefits the Most From Financial Education?
At 3rd Decade, we often get asked why we don’t offer our program to high school students or why we chose to work with young adults instead of teens. While there are a few reasons for this, the fact of the matter is that we have learned young adults who are just beginning their careers are most ready to hear and apply what we are teaching and mentoring. Yes, we touch on budgeting, credit, savings, and a few other topics that everyone should understand, including – and maybe especially – high schoolers, but the bulk of our curriculum and the meetings with financial mentors focuses mostly on investing, retirement savings, taxes and planning for the future. Through trial and error, we found that young adults in their “3rd Decade” of life (see what we did there) are not only in dire need of this guidance but are also asking for it.
Financial Education in High School
This study, published last month by TIAA echoed what we always expected through our anecdotal experience, but they could confirm it with data. Below are the Key Findings quoted directly from the study:
- Among the overall population, there is no evidence financial education in high school improves the likelihood of having a retirement account, having a non-retirement savings account, or owning a home.
- There is no clear evidence that such education decreases stress related to retirement savings, increases the likelihood of planning for retirement, or reduces the likelihood of borrowing from one’s retirement account.
- Since prior research finds high school financial education improves credit and debt outcomes, priority topics should include budgeting, credit, debt and saving for emergencies before addressing retirement savings.
Does this study suggest that we shouldn’t be teaching personal finance at all to high schoolers? Absolutely not, but it does point out that it is key to teach high school students the right things. Imagine the depth teachers can explore around debt, savings, credit, and even student loans without the additional need to get into the complexities of investing and retirement savings. I hope we’ll be far away from the likes of the “stock-picking game” as everyone’s intro to investing and instead ensure that our high school students graduate with a clear understanding of financial basics that they will be able to build upon for the rest of their lives.
Educating at an Actionable Time
This might sound a little self-serving, but for me, the study also highlighted how crucial the education is that 3rd Decade provides. If high school students are, by a large majority, not even learning about these topics and the ones that are getting some education on retirement saving/investing aren’t applying it, then 3rd Decade providing young adults with financial education when they are first starting their careers and can apply what they are learning is extremely valuable and beneficial. It’s going to take a lot of people and effort to help solve the financial education problems that are so prevalent, and we’re proud to be a part of the solution.