By John Pelletier

It is gratifying to know that state legislators and education regulators across the nation are moving to improve financial literacy education at the high school level. It seems logical to offer personal finance courses to high school students, since they soon will be dealing with college loans and other financial decisions related to entering the workforce.

In three report cards issued biennially since 2013, Center for Financial Literacy at Champlain College has graded states for their high school efforts.

In truth, there have been too many D and F grades, but initiatives in several states signal that states are beginning to take the subject seriously.

In recent months, Wisconsin and Kentucky passed laws to improve personal finance education, Vermont and Delaware have implemented regulatory changes, and Massachusetts, Louisiana and Florida may pass legislation.

If all these changes are put in place, we would have 1 out of 5 states with Ds and Fs, whereas after our first report card in 2013, it was 1 out of 3.

This means more high school graduates will be better prepared for work or college and the financial decisions both bring.

But what about elementary and middle school? There are not enough states that require personal finance education in those grades. More should.

I believe that this subject is as important in today's world as math and reading, and should start early at home and in school and continue through college.

In mathematics, you start with counting, move on to addition and subtraction, and then move on to division and multiplication. You need to learn letters before you can read. Personal finance education should be a cumulative process, with age-appropriate topics taught each school year.

I believe that teaching young people about money, its value, how to save, invest and spend, and how not to waste it -- can and should be taught in elementary and middle school. Here's my plan:

Elementary School Learning Goals

  • Understanding of money and ways to earn it
  • Basic knowledge of spending choices
  • How savings accounts can protect their money and pay interest
  • How dangerous it is to share financial information online
  • Fundamental understanding of the concept of budgeting. 

Middle School Learning Goals

  • Understanding of compound interest and how it impacts savings and credit
  • Knowledge of how credit cards and student loans work
  • Grasp of concepts like opportunity costs and delayed gratification
  • Appreciation of the links between education and income, careers and income
  • Basic knowledge of college costs
  • More advanced understanding of budgeting and saving
  • Skills to protect their identity in this technologically driven world

Personal finance learning goals for high school have been or are being implemented by many states. Suffice it to say no young person should graduate from high school unprepared for the financial decisions he or she will have to make in college or the workplace.

Champlain College requires personal finance education, but too few colleges do. It's a critical time to learn about budgeting, student loans, investing in 401Ks, how credit works and more, all of which will be staring college students in the face in just a few short years.

For those who don't think personal finance is important enough to be taught in every grade, consider that financially illiterate adults were the victims who suffered the most during the Great Recession. If they had been taught personal finance in school, perhaps many would not have entered into those sub-prime mortgages.

On the positive side, when young children learn early about money, they are more likely as adults to save for rainy days and retirement, invest in stocks and avoid high-cost alternative financial services, like payday lending and auto title loans.

John Pelletier is director of the Center for Financial Literacy at Champlain College in Burlington, Vt.

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