A Big Push for Mandatory Personal Finance Classes in School

in a new paper, the highly influential Consumer Financial Protection Bureau endorses mandatory personal finance classes in grades K-12.

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With nations like Australia and the U.K. having voted to make financial education mandatory in their school systems, the U.S. is moving aggressively to re-assert leadership on this important front in the global fight against financial illiteracy.

Last week, the U.S. Consumer Financial Protection Bureau unveiled Transforming the Financial Lives of a Generation of Young Americans, a white paper with specific recommendations for advancing financial education in grades K-12. Meanwhile, the Treasury Department has just gone live with moneyasyoulearn.org, a website offering teachers ready-made personal finance lessons that fit neatly into existing math and English courses.

Schools in the U.S. are governed at the state level. It is unlikely we’ll ever have a federal mandate for K-12 financial education like that in the U.K. or Australia. But most states have agreed to a common core initiative that dictates certain educational standards across state lines and which will be in force next year. Treasury’s new website will help teachers build personal finance lessons into courses they must redesign anyway.

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The bigger development, though, is the CFPB officially weighing in. This is a powerful federal watchdog that sprang from the financial crisis. Its wide-ranging mission is to protect the financial interests of individuals. Since inception, the CFPB has been focused on things like simplified financial statements and mortgages. Now turning to kids and money, the agency’s thoughts will carry a lot of weight.

“Young people today and future generations should not have to repeat the financial mistakes made by earlier generations,” director Richard Cordray writes in the paper. “This is why the CFPB is supporting a plan to bring financial education into K-12 classrooms.”

The agency’s five recommendations:

  • Introduce key financial concepts as early as kindergarten and require a stand-alone personal finance course for graduation from high school.
  • Include personal finance questions in standardized tests.
  • Provide practical, hands-on learning opportunities as they relate to personal money management.
  • Offer teachers incentives and training to lead a personal finance class.
  • Provide parents with the tools to discuss money topics with their kids at home.

These are important steps in raising a more financially confident next generation, and they correctly identify our biggest obstacles.

Just four states currently require a stand-alone course in personal finance. Unless this subject matter is tested it will never be taught. Research shows that games and practical money choices are most effective with financial lessons. In surveys, just one in five teachers say they feel comfortable teaching about money. And of course, parents are hands-down the most influential adults in any child’s life.

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The CFPB is a welcome new and influential voice in the debate over whether and how to teach kids about money at school. As the agency concludes in its white paper:

“Young people are not prepared to manage their finances when they reach adulthood. At the same time, the current financial services marketplace is increasingly complex. In the face of this very real need, American education should include approaches to teach young people about their finances. Part of that task starts at home. But young people spend the majority of their time in school. Therefore, it makes sense to offer financial education early and consistently throughout the K-12 school years.”


I am so glad that CFPB finally decided to make financial literacy in elementary schools a top priority. It is high time!!!

I would also like to point out that any resources offered by credit card issuers, credit unions, banks, and any other financial institution should be looked at with a grain of salt. They do an excellent job in teaching everyone to save. However, they never talk about the relationship between risk and return, or, they completely ignore the element of risk in any of their materials. 

The proposal by CFPB is  a great start. 

Prakash Dheeriya, PhD

Father, Author and Professor of Finance, Finance for Kidz series

finance4kidz dot com


Great idea, wish this will be implemented in Zimbabwe


Well, this is good. "Young people are not prepared to manage their finances when they reach adulthood"  Why can't parents just the educating? Reading this with interest because I'm reading a book and Vivek Sood mentioned in the book The 5-Star Business Networks that innovation is important for business and the different strategies the company will present. I reckon this is applicable to all, even in education.


Well, I think it's great that the previous commenters want to learn more about managing money.  If you keep reading, little by little, you will become more confident in your financial knowledge.  The American Association of Individual Investors (AAII) is a great organization dedicated to helping people education themselves about investing.

Of course, you could always read my blog, too. Good luck!


Boomers, Markets & Money


As a recent college grad from the class of 2012, I would have loved to have taken a personal finance course at some point during my education. Sure, I can tell you all about income statements and balance sheets for a corporation, but the thought of doing any sort of personal investing makes my head spin. I have a standard checking and savings account, one (student) credit card, and a few store credit cards, and I don't expect to have much more of that in the future. Doing my own taxes this year for the first time... that was just painful, even with helpful software.

I remember in the seventh grade, my math teacher gave us a project around the holidays. We had a fake budget and had to "buy" presents for 20 friends and family members. This project taught us how to write checks. I never wrote a check until sometime during college, but all I could think of was "Thank you Mr. Wynne" for those lessons.

Even though I have nearly a year under my belt in the "real world," I still feel like I have no idea what I'm doing. What do I do with my pension fund? What if I leave my company... what do I do with my 401k? What's a better way to handle money I'm saving for future big purchases (like a house or grad school) other than just sticking it in my savings account? I was fortunate enough to learn the basics from my parents, and my education in business gives me some idea of what all the terminology is. Still, I feel like I'm floundering a bit. I think implementing personal finance lessons and courses in schools is a great idea!


I think it's important for schools to emphasize the importance of finance and to provide information. Even so, as the article states, parents are important, too. They are models who have YEARS to teach. Everyday opportunities are there if parents just take them, but as the teacher response shows, many parents don't feel ready to guide their kids in money. These initiatives will have little effect, in my opinion, unless parents learn, as well. Otherwise, kids get dual messages that may conflict. But even things like using http://www.bankaroo.com, clipping coupons, explaining how the ATM doesn't give "free" money, etc. are a start.


I couldn't agree more to the importance of personal finance education. I am in the fourth year of my undergraduate studies and feel ashamed when inside a bank and I don't know the difference between debit and credit while filling up a form.