It's no secret that many young people today are not well-versed in personal finance.Image Credit: Google
A recent study by the Financial Industry Regulatory Authority (FINRA) found that only 24% of millennials could correctly answer four basic financial literacy questions.Image Credit: Google
Given these findings, it's not surprising that many states are now mandating personal finance education in their public high schools.Image Credit: Google
So far, the results of these mandates are mixed.Image Credit: Google
A study by the Center for Financial Literacy at Champlain College found that while test scores improved after states implemented personal finance mandates.Image Credit: Google
There was no significant difference in actual financial behaviors, like saving and investing. There are a number of possible explanations for this discrepancy.Image Credit: Google
First, personal finance is often taught as a stand-alone course, rather than integrated into other subjects like math or social studies.Image Credit: Google
This can make the material seem abstract and unimportant to students.Image Credit: Google
Second, personal finance courses tend to focus on basic concepts like budgeting and credit. Rather than more sophisticated topics like investing and retirement planning.
This may be due to the fact that many teachers of personal finance are not themselves financial experts.
Finally, the timing of personal finance education may also be a factor.
For many students, the material covered in personal finance courses is not relevant to their lives until they are well into their 20s or 30s.
By that time, it may be too late to make meaningful changes to their financial behaviors.