By John Pelletier
FRED DUFOUR/AFP/Getty Images
April is Financial Literacy Month, a good time to note that in the education sector, there has been significant progress in teaching this subject in recent years.
More states are requiring this type of education in K-12 classrooms, particularly in high school. Twenty-seven states require that personal finance topics be taught in a high school course, like economics, that students must take to graduate. Five of those states mandate a half-year course (or its equivalent) exclusively dedicated to the subject.
Thanks to the hard work of amazing nonprofits, there is free access to solid personal finance curriculum and tools. So the creation of a rigorous state education mandate in personal finance is not burdened with large costs for classroom textbooks and other materials.
But few teachers are prepared to teach personal finance, and in most states you can teach a class despite not having to prove you are expert in the field, as educators must do in other subjects.
In a national survey of adults by the FINRA Investor Education Foundation, only one in five reported having taken personal finance at school, college or the workplace. Public school teachers don’t emerge from college with such a specialty, so it’s no wonder they feel less than qualified to teach personal finance.
So we often have teachers with no prior training doing their best to pass on financial concepts to students. This matters because research shows that financial education in schools is most effective when led by properly trained teachers.
Can you imagine if such a system existed in mathematics or foreign language courses?
Susan Sharkey of the National Endowment for Financial Education (NEFE) notes that there are few requirements for individuals who teach the subject.
A University of Wisconsin study confirmed that more than 80% of teachers don’t feel confident teaching personal finance, and that the best way to build teacher confidence, the study found, is with proper training.
Our center partnered with NEFE to study Vermont teachers, who were provided 45 hours of graduate-level financial literacy training. The training increased the self-confidence of these educators by 139%.
We also found that students taught by the well-trained teachers had positive material changes in financial capability knowledge and behaviors, while control group students, who received no instruction, showed no material change. The trained students also were on par with Generation Xers (ages 35-49), outperforming the control group students and older Millennials (ages 18-34) in the population at large.
We also discovered a positive side benefit accrues to the trained teachers—they reported positive material changes managing their own personal finances.
Although most states currently lack substantive requirements or certifications for who can teach personal finance, we think the results of our study and others clearly call for states to consider funding teacher training and requiring certification.
Quality training programs in this field do exist. Communities and schools can build expertise in personal finance through professional resources, coursework and training provided by wonderful nonprofit organizations like NEFE, Next Gen Personal Finance, Take Charge Today, The Council for Economic Education, and Junior Achievement.
A good resource is Jump$tart Coalition financial educator workshops. You can check with your local coalition to find workshops in your area. Check with your local coalition to find workshops in your state.
The amount of free, quality educator training programs in personal finance is currently not sufficient for the need. We need philanthropists, foundations and corporations to partner with higher education institutions to make sure that each state has free, high-quality training available for educators.
Right know only a handful of colleges and universities in our nation offer this type of training for our K-12 educators. Our center is one of the few offering this type of free graduate-level training since 2011.
We expect our teachers to be highly trained and confident in math, science, language arts, social studies, world languages, health, sex and physical education.
Personal finance qualifications must be just as robust.
John Pelletier is director of the Center for Financial Literacy at Champlain College.