Nearly two-thirds of Americans can’t pass a basic financial literacy test.
A 2015 study by the FINRA Foundation found some rather distressing information about Americans’ financial literacy. Nearly two-thirds can’t pass a basic financial literacy test with questions on compound interest, inflation, diversification, and mortgage interest. To help reverse this trend, a Wisconsin school is now making personal finance a required course.
Since 2003, Oconomowoc High School in Wisconsin has offered a class in personal finance as an elective, with many students taking it at the behest of their parents. “Many past students often commented that the class was so meaningful that it should be required for all students at the high school,” Kyla Stefan, Oconomowoc’s business education teacher, told Yahoo Finance. So starting with this year’s freshman class, personal finance is now mandatory for all students.
The class meets 90 minutes every day for nine weeks, and its curriculum centers around financial issues students will soon face in the real world. The class covers the basics of using credit cards, reading and signing leases, investing, and how to pay off student loans. “The kids need to understand the pitfalls of consumer debt right away; it is one of the biggest problems our economy faces, and it’s growing every day,” said Tim Duchow, a member of the staff advisory team who helped develop the curriculum.
“Whether it is evaluating a university based on the expected debt load necessary to attend or learning the basics of retirement investing and compounding interest, we want our students to be financially literate,” said John Flannery, director of curriculum at Oconomowoc Area School District. “We believe this requirement ensures all students will leave with acquired skills to prepare each for these scenarios in their future.”