What you don't know can kill you … or at least, as it pertains to finances, kill your pocketbook.

It's a pretty obvious statement, but one that historically has failed to sway academic curriculum designers until only relatively recently. For the majority of just about any age group reading this letter, we had a much higher chance of learning how to carve wood, make a pie crust, or climb a rope than learning how to balance a checkbook, manage our credit, or invest in stocks.

Suffice it to say, this has had a drastically negative impact on millions of Americans' financial practices and, as a result, financial and even mental well-being.

If there's any consolation, though, the educational system is righting itself. For the past 20 years or so, there has been a concerted effort to integrate financial and economic courses into standard curricula, and that progress is really starting to pile up.

Based on the latest data, if these trends keep up, the kids really will be all right.

The Tea

Financial literacy isn't just a potent problem in the U.S. It's a persistent one.

Consider the TIAA Institute-GFLEC (Global Financial Literacy Excellence Center) Personal Finance Index—an "annual barometer of financial literacy among U.S. adults" that has given us a glimpse into American financial issues since 2017.

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The 2023 index asked American adults 28 questions—and on average, they answered correctly only 48% of the time. That included downright terrible scores on questions about comprehending risk; respondents were only able to get 35% of those correct.

The overall testing rate, while bad on its own, is more troubling when you realize it's not an outlier. The number has been stuck around 50% since the TIAA/GFLEC's inaugural reading.

So … what kind of problems can that cause?

TIAA/GFLEC say that, compared to those with a very high level of financial literacy, American workers with a very low level of financial literacy are:

• More than four times as likely to typically have difficulty making ends meet
• Nearly three times as likely to be debt-constrained
• More than four times as likely to have less than one month's worth of emergency savings
• More than three times as likely to spend at least 10 hours a week coping with issues related to personal finances
• More than four times as likely to have stopped saving for retirement
• Twice as likely to have decreased their retirement savings

If you're currently out of school, getting that financial literacy now is, bluntly, up to you.

But educators, lawmakers, and advocacy groups have all identified the gap that caused this in the first place—lack of attention paid to the subject during school—and are increasingly doing something about it.

The Take

The Council for Economic Education (CEE), an organization dedicated to advocating for personal finance and economics education for children, puts out a biennial Survey of the States that details the progress being made in American schools.

And the news is good.

According to the CEE's latest Survey of the States, more than two-thirds of all states (35) now require students to take at least one personal finance course before they can graduate from high school. (The quick breakdown: 20 states require a standalone course in personal finance, and another 15 have integrated required per-fi coursework into another class.)

To give you an idea of just how much progress that is:

• In just the past two years, 12 states have added required personal finance coursework: Connecticut, Florida, Indiana, Louisiana, Michigan, Minnesota, Montana, Oregon, Pennsylvania, South Carolina, West Virginia, and Wisconsin.
• In 1998, CEE's first year collecting such data, just one state had any required coursework (a standalone class).

Source: Council for Economic Education

The changes since 2022 will impact more than 10 million kids in K-12, or roughly 21% of all American students.

The CEE adds that, of the 35 states requiring per-fi coursework, "15 states require a semester-long course on personal finance—our gold standard."

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Also on the upswing, though in a different way, is states whose schools are requiring kids to take high-school level coursework in economics. On net, three more states have begun to mandate economics coursework between 2022 and 2024. Just note that the number of states with standalone economics courses is declining—instead, the improvement is coming through states whose schools are integrating economics into existing classes.

Source: Council for Economic Education

If you're a parent and live in one of these states, great—your children are well on their way to having a much better financial education than many of us enjoyed.

If not? The only way to make progress is to speak out. You can contact the CEE, for one, and tell them there are unmet needs in your state. Or you can go directly to the source—talk to your state- and even district-level leadership and let them know you want your kids to have the same advantages as students in much of the rest of the country.

And, of course, you can always look to us at WealthUp. We have a wealth of information about teaching your kids the basics of money … and we have plenty of resources for adults who want to get better at their own personal finances.

Enjoy your Saturday, and get ready—basketball bracket season is nigh!

Riley & Kyle

WealthUp (Young and the Invested is now WealthUp)

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