Financial Literacy for High School Students—Teaching Personal Finances

One of the most important life lessons students should learn early on is how to manage personal finances. That said, financial literacy as a subject in high school isn’t that common.

Money and debt are some of the reasons adults experience severe stress, but they are not the only ones. High school students’ anxiety is also triggered by the worry about finances. They are starting to consider what careers after high school they want to pursue and whether what they are interested in studying in college will bring them financial freedom.

The secret to living a life unburdened by financial anxiety isn’t to be a millionaire but to know how to manage personal finances wisely.

Educators are trying to incorporate financial literacy into the school’s curriculum by coming up with lesson plans or entire programs based on the topic. Schools need to set official standards for teaching students about income, expenses, assets, mortgage debts, and credit scores and make sure they achieve those standards.

Let’s look at financial literacy—what it encompasses, why students must learn it, and how schools can incorporate it into their curricula.

Why Financial Literacy Matters and What It Means in a High School Curriculum

Credit: Alexander Mils

Since high school is supposed to prepare students for the real world, it needs to teach these concepts to students:

• Growth mindset
• Health
• Social and emotional learning
• Financial literacy

Financial literacy is a soft skill that enables a person to manage money wisely. As a result, when someone is financially literate, they:

• Earn more than they spend
• Know the importance of budgeting
• Have a life-long financial plan
• Diversify their investments
• Acquire valuable assets

While SEL and a growth mindset can be promoted through the overall school culture and climate, financial literacy must be a course students have to take and pass to graduate. Only then can students learn all aspects of money management.

Being financially literate makes it possible for an individual to live a quality life. They maximize their income and savings. They also don’t stress about money to the extent that it harms their personal happiness. 

People who don’t know how to manage their personal finances don’t have a plan, don’t do budgeting, and usually spend more than they earn. This leads to increasing debts as life progresses and, of course, increased anxiety and depression stemming from financial worries.

When setting the standards for financial literacy, high schools need to create a plan for introducing a course that enables students to learn these key aspects of financial literacy:

Term	What It Is	What Students Learn
Income	The money one earns	Maximizing their income
Expenses	The money one spends	Budgeting their expenses, saving consistently, and spending less than they earn
Liability	Debts one owes	Applying for loans, calculating interest rates, and paying off debts in time
Asset	One’s possessions, such as a house or a bank account	Building valuable assets through saving

Teaching Financial Literacy to High School Students—The Statistics

The majority of school districts across the country include financial literacy in their educational standards, but many of them do not implement these standards fully. According to the 2020 Survey of the States report that looks at economic and personal finance education in America:

• Five states do not have financial literacy included in K-12 standards
• Only six states require students to take a standalone personal finance course  
• Merely five states require students to pass the test in the financial literacy course to graduate

Not all the numbers are grim. More schools are offering financial literacy courses to high school students than in the previous several years. The problem is that the majority of those courses are integrated into other courses and aren’t mandatory. This doesn’t enable all students to learn all aspects of money management.

Let’s take a look at more data from the same report and how the numbers reflect some positive change:

The Number of States	What The States Do/Don’t Do
25	Make a course in economics obligatory for high school students, which is three more than in 2018
21	Make a course in personal finance obligatory for high school students, which is four more than in 2018
5	Do not have personal finance standards

The survey also found that two fewer states require personal finance testing from students than in 2018, and six fewer require economic testing than in 2018.

The Council for Economic Education—which publishes the Survey of States report every two years—offers several pieces of advice for implementing financial literacy standards across states:

• Promote standards and course requirements on a national level
• Request economics and personal finance courses in your district
• Ask for the professional development teachers need
• Reach out to CEE affiliates to learn more

Are Teachers Prepared for Teaching Financial Literacy in High School?

An issue regarding the implementation of financial literacy standards and course requirements in K-12 schools is that many teachers don’t feel competent enough to teach students money management.

The 2010 research by the National Endowment for Financial Education reports these findings:

The Number of Teachers	Teachers’ Standpoints
63.8%	Feel incompetent to achieve their state’s financial literacy standards
29.7%	Are educating students on financial literacy either in standalone or integrated courses
89%	Believe students should take and pass a personal finance course in high school to graduate
20%	Feel “very competent” to teach financial literacy

There hasn’t been enough research to tell us whether anything changed significantly since 2010.

The 2015 North Carolina report on teacher-preparedness to implement financial literacy standards in the classroom shows the majority of teachers in the region believe financial literacy matters and feel confident about teaching it. Even they believe they can’t teach specific course requirements.

Opinion on the matter exists—that there aren’t enough qualified teachers to educate students on all aspects of money management.

Financial Literacy Topics for High School Students

Credit: Annie Spratt

Educators are there to make sure students learn money management in high school so they can live independently in college and spend and save their money wisely throughout their entire lives.

Making lesson plans and integrating financial literacy programs into the school curriculum requires that teachers understand what students must learn.

Here are some of the most important financial literacy topics for high school students:

1. Making decisions regarding money
2. Minimizing college costs
3. Maximizing income
4. Spending and budgeting
5. Saving and investing
6. Banking
7. Using credit and credit cards wisely
8. Applying for loans and acquiring assets

Making Decisions Regarding Money

The first step to teaching students practical money skills is instructing them how to make decisions about money wisely. Whether they want to move or buy a house one day, they need to know how to go about making those decisions. Money plays a crucial role when choosing what to do in such situations and many others.

Decision-making is also a soft skill that’s included in social and emotional learning standards. Students need to know that the process of decision-making has several stages:

1. Identifying the objective or the problem
2. Gathering information and brainstorming potential courses of action
3. Taking consequences of each choice into consideration
4. Estimating the alternative choices
5. Deciding on the best course of action
6. Evaluating the outcome

After learning all steps in the responsible decision-making process, students should know:

• All the factors that can contribute to making decisions
• Different strategies people use to make a choice
• What economic conditions influence personal and financial choices 

Give students examples of a decision-making process, whether in reading material or by playing a video or a movie, and make mock situations in which students roleplay the process, evaluating all aspects of it. 

Minimizing College Costs

More students are going to college after high school today than in the past decades, but college tuition and college debt keep increasing as well. If students knew how to manage their money and make smart decisions about college costs, they would be able to minimize their cost of attendance.

From applying for financial aid and college scholarships to getting college credits while in high school, students have many ways of minimizing their tuitions. Many scholarships also cover general college costs, like board, textbooks, and transportation. Being financially literate implies thinking ahead, and students should form the habit of thinking in advance when planning their college costs.

Teach students how to choose financial aid and apply for it and instruct them on how to use college loans wisely so the loans pay off. Possessing practical money skills would also help make the entire college application process less stressful for teens than if they worried about finances.

Maximizing Income

Money management starts with earning money. Students should learn how their career choices will impact their income.

One of the most common reasons why high school students are stressed is because they don’t know how to choose a career. By teaching students how to make smart decisions, you help them pick a career. They must understand their choice influences their financial stability.

Students don’t need to pursue high-profile careers to enjoy financial freedom, but they do need to understand how to maximize their income when they embark on their career paths.

Teach students that they will be paid for the value they bring to the company that employs them. If students are already interns or volunteers, they should consider what they are bringing to the table by holding those positions. When students know what their skills are, are willing to work on them, and can put them to use in practice, they can:

• Choose careers that support their interests and offer opportunities for growth
• Make a life-long career plan
• Assess the current employment market
• Apply for jobs and write outstanding cover letters
• Prepare for job interviews
• Realize what their skills are and how much they ought to be paid for applying them
• Understand additional job costs
• Identify employment benefits
• Recognize different work contracts
• Pursue additional career training 

Financial Planning for High School Students—Spending and Budgeting

Credit: Kelly Sikkema

Teaching about expenses is one of the most important lessons in a personal finance course. When young adults start earning money for the first time, they have the tendency to lose track of where their money goes, which causes them to be in the red. In fact, having no clue where one spends one’s income is a common phenomenon with adults who have been earning money for a long time as well. 

Budgeting is a financial plan that allows individuals to know how much they are spending regularly, and students should learn to budget in high school. Teach students that they need to have a personal budget as soon as they start earning any income. 

Having a spending plan is what brings financial stability, regardless of how low or high one’s income is. Expenses can include:

• Rent
• Utilities
• Debt repayments
• Savings

Budgeting also means an individual knows how much money they have once they cover the expenses and allocate a certain percentage for saving.

Saving and Investing

If you teach students the value of saving in high school, they can form the habit of saving early on. They should know that they need to have a financial plan and learn how to implement it. For students to come up with short-term and long-term financial plans, they need to learn how to:

1. Set their personal financial goals
2. Identify the steps they’ll take to achieve them, such as saving up or applying for jobs
3. Determine the timeframe for meeting the goals
4. Calculate their expenses
5. Create and keep to a budget

Carrying out a financial plan starts with taking action, and two of the most effective actions are saving and investing.

Teach students to:

• Recognize the advantages of saving money
• Identify different saving methods
• Include the amount for saving in their budget

When it comes to investing, students should know:

• How to make an investment decision
• The types of popular investment methods
• What mutual funds are
• The value of diversifying their investments instead of giving their money to one source
• How to recognize investment fraud

Teach your students how to make a savings account and create a retirement plan. They should learn how these contribute to financial freedom. Saving money also helps them in unexpected scenarios, such as falling ill or having to repair a car. 

Financial Education for High School Students—Banking

Students know that banks offer various financial services, but they probably don’t know how to use those services to their benefit.

The first lesson when teaching students about banking should be to list all services banks offer, such as:

• Checking accounts
• ATMs
• Credit and debit cards
• Electronic payments
• Savings accounts

Students should learn how these services work, starting from opening a checking account and using ATMs and debit cards. Other skills to teach in the lesson are:

• Writing checks
• Understanding the responsibilities of keeping a bank account
• Calculating transaction fees and how to minimize them 
• Making a deposit 
• Understanding bank interest rates

Using Credit and Credit Cards Wisely

Credit and credit cards are tightly connected with banks and financial services.

Explain to students what consumer credit is and what the advantages and disadvantages of using it are. Students should also know what their rights and responsibilities are when using credit and credit cards and how to build a solid credit history.  

Applying for Loans—Mortgages and Other Liabilities

A major part of effective money management is knowing when to borrow money and why. Getting into debt over insignificant investments—in other words, buying anything that is not a valuable asset with the money offered as credit—is irresponsible and doesn’t bring a return on investment. 

Acquiring valuable assets, like a car or a house, is a good reason for applying for a loan, but it calls for a plan and consideration of all aspects.

For example, when it comes to buying a house, students should learn:

• What differences between renting and owning a home are
• What types of mortgages exist
• How to apply for a mortgage
• What aspects of home-buying there are

Buying a vehicle requires at least the understanding of:

• All costs of owning and maintaining a vehicle
• Warranties and how they work
• The role, rights, and responsibilities of a co-signer
• Leasing

Financial Literacy for High School Students Resources—Programs and Lesson Plans

Credit: Gabrielle Henderson

Since more schools are looking into ways to teach students practical money skills, there are many teacher resources related to the topic.

You can find many programs set up to help schools include financial literacy courses in their curriculum. The sheets that help teachers create lesson plans to teach all aspects of financial literacy are downloadable.

Here are some of the best places to get you started:

Programs and Curricula	Lesson Plans
Washington State Department of Financial Institutions	Practical Money Skills
TeachFinLit.org	In Charge
Financial Educators Council	National Education Association

Is There a Financial Literacy Course in Your High School?

As you have seen, most states offer financial literacy courses to high school students. Do you teach in a school that meets the state’s financial literacy standards and course requirements?

If so, we want to hear from you. Tell us how you go about teaching all aspects of money management to students and whether students need to pass the course to graduate.

If there isn’t a personal finance class in your high school or it’s only optional, write to us about what to do to make a change for the better.

Students need to learn how to manage money in high school so that they can make smart decisions, earn more than they spend, and enjoy life without worrying about money and debts.

We’ll publish your ideas on our blog to start a conversation. Let’s make an impact together!