Financial literacy is the ability to use knowledge and skills to make effective and informed money-management decisions. Personal financial literacy includes everything from balancing a checkbook to long-term retirement planning. While literacy – the ability to read and write – is a fundamental part of the education system, financial literacy is often left out of the curriculum. In fact, a report from The Center for Financial Literacy at Champlain College found that just 40% of states earned an A or B grade for producing the most financially literate high-school students. How did your state do? Read on.

Financial Literacy Report Cards

The "2013 National Report Card on State Efforts to Improve Financial Literacy in High Schools" is based on a review of financial-literacy legislation summaries kept by the National Conference of State Legislatures from 1999 to 2012. (Click on the link above to read the report's detailed assessment of your state.) The data were compiled by the JumpStart Coalition on Personal Financial Literacy and the Council for Economic Education's 2011 Survey of the States, with additional research to address inconsistencies between among sources or where further information was warranted.

The report grades each state based on its efforts to teach the ABCs of financial literacy to high-school students. Note: There is no national effort to track financial education at the elementary and middle school levels, nor at the college level. In true school fashion, the report rates each state with a letter grade:

A State requires a standalone personal-finance course or that personal-finance topics be included in another mandatory course. In either case, the students' personal-finance knowledge is assessed.

B State mandates personal-finance education as part of another course, but does not require assessment. In some instances, a math course may includes a partial assessment of persona- finance knowledge.

C State requires high schools to offer a personal-finance elective, but there is no accountability and students are not assessed.

D State allows schools to teach personal finance as an elective, but does not require the course for graduation.

F State has few or no requirements for personal-finance education at the high-school level.

Who Made the Grade

Seven states (14%) earned an A on the report card: Georgia, Idaho, Louisiana, Missouri, Tennessee, Utah and Virginia. Of these, only Missouri, Tennessee, Utah and Virginia require a one-semester standalone course in personal finance as a graduation requirement. Tennessee also requires that students be given a personal-finance assessment. Georgia, Idaho and Louisiana offer personal-finance instruction as part of another course, and require student assessment on financial literacy. Several states, including Louisiana and Tennesee, have also created commissions to promote personal finance education in the state and make recommendations.

Earning a B on the report card were 13 states (26%): Arizona, Colorado, Illinois, Kansas, New Hampshire, New Jersey, New York, North Carolina, Ohio, South Carolina, South Dakota, Texas and West Virginia. In general, states with a B grade include personal-finance topics in their instructional guidelines, and require local school districts to put them into practice. To graduate from high school in a B state, students must take a course that covers personal-finance topics. Courses that may include these topics: civics, economics, family and consumer sciences, business, and mathematics.

Room for Improvement

Eight states (16%) earned a C on the report card: Indiana, Iowa, Kentucky, Mississippi, Nevada, New Mexico, Oklahoma and Wisconsin. In these states, personal-finance courses are offered as an elective, and student assessments are not required. It is up to local school boards to determine how these topics are integrated into the classroom. Lack of accountability means it is unclear how these state determine if local schools are meeting the requirements.

Eleven states (22%) received a D grade: Florida, Maine, Maryland, Michigan, Minnesota, Montana, North Dakota, Oregon, Pennsylvania, Vermont and Wyoming. In these states, personal-finance topics are typically taught as an elective, with \ no requirement for student assessment.

Eleven states (22%) also earned an F, the lowest score possible. The states – Alabama, Alaska, Arkansas, California, Connecticut, Delaware, Hawaii, Massachusetts, Nebraska, Rhode Island and Washington – have few or no requirements for personal-finance education at the high-school level. Rhode Island, for example, does not include the subject in the state's educational standards and has no personal-finance requirement. Connecticut's failing grade is due in part to the fact that – despite seven attempts since 2007 to legislate bills to include financial literacy in its schools – all failed to pass.

How to Get Financial Literacy Anyway

Some local school districts offer personal-finance courses even when they are not required by the state. For example, Vermont earned a D in the report, yet a number of Vermont high schools are teaching personal finance; some mandate the training as a graduation requirement. Because these are not state requirements, getting it in a local district requires enlisting local superintendents, school boards, principals and teachers.

The Bottom Line

Parents and schools should note the report's "Four Keys to Success" in high-school financial literacy:

  1. Required Classes Financial-literacy topics have to be part of a course students must take in order to graduate.
  2. Training While many teachers understand the importance of financial literacy, few feel qualified to teach the subject.
  3. Funding It takes cash to make classes available to all high-school students.
  4. Assessments Standardized assessments help ensure that high-school classroom personal-finance education is effective.

If you do favor financial-literacy training, be aware that support is not universal.While proponents believe the training can help students make better financial choices now and in the future, opponents argue that financial literacy education does not work, or that it increases confidence without improving ability. Students who know "just enough to be dangerous" could make worse decisions. That's why high quality personal finance education, which cultivates both confidence and ability, is paramount.

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