THE IMPORTANCE OF FINANCIAL LITERACY IN SCHOOLS FOR KIDS AND TEENS
- KidVestors
- Jul 15
- 7 min read
Updated: Aug 22
What you’ll learn:
Finance is an essential life skill. Yet, financial literacy in schools often takes a backseat in traditional school curricula. By eighth grade, students on track in subjects such as math, literacy, and science already have foundational knowledge for life after graduation. Advanced subjects, like calculus or chemistry, primarily benefit a small percentage of students—those pursuing careers in engineering, medicine, or science. But here’s the kicker: 100% of people are affected by money.
So, why isn’t financial literacy given as much importance as reading or math? It’s a skill everyone will use. Whether budgeting for groceries, investing for the future, building credit to buy a car or home, or eliminating debt, financial literacy is crucial. Isn’t it time we made financial education as essential as reading and writing?
What is Financial Literacy?
Financial literacy is the ability to understand and manage money effectively. It encompasses skills like budgeting, saving, investing, and comprehending credit and debt. Being financially literate means making smart financial decisions. This includes avoiding unnecessary debt, growing savings, and planning for the future.
Think of financial literacy as navigating the world of money. It helps you handle daily expenses, make significant purchases, and invest for the long run, keeping you in control and allowing you to build a secure financial future.
How Many People Are Financially Literate?
In the U.S., only about 57% of adults are considered financially literate. Nearly half the country doesn’t entirely grasp key concepts like budgeting, saving, interest rates, or credit. When we look globally,
the numbers drop further. Studies show that only 1 in 3 adults worldwide are financially literate. That’s just 33% of the global population with a solid understanding of basic financial concepts.
This lack of financial know-how has real consequences. It's not merely about tracking your spending. It impacts people's ability to manage debt, build long-term wealth, plan for retirement, or avoid financial traps. Young people are especially vulnerable. They often step into adulthood with student loan debt, minimal emergency savings, and low understanding of smart financial choices.
The world faces a significant financial literacy gap. The good news? It's fixable. With the right education and resources, we can help more people understand money, build better habits, and create a future unimpeded by what they didn’t learn in school.
Why Should Financial Literacy Be In Schools?
When financial literacy is neglected in schools, the consequences can be severe. Students who are not taught financial skills at an early age may face considerable financial mistakes that could have been avoided. What are the benefits of teaching financial literacy?
Not Just Numbers: The Real-World Benefits
Financial literacy empowers students to make informed choices.
They gain crucial skills for budgeting, saving, and investing.
These skills can help them navigate financial challenges successfully.
Additionally, students in underserved communities often suffer disproportionately from the absence of financial education.
Understanding how to manage money can significantly impact students' lives. They are better equipped to avoid pitfalls like debt and financial insecurity. Furthermore, early financial education can lead to increased confidence in handling personal financing, enabling students to make informed decisions throughout their lives.
How You Can Partner With KidVestors
KidVestors is an excellent option for districts looking to equip students with real-world financial skills. Our multi award-winning program makes financial education fun, accessible, and effective through a rewards-based learning model that has demonstrated impact.
Educators appreciate our all-in-one portal. It simplifies everything—from pre-made, standards-aligned lesson plans to automated grading and classroom management tools. We facilitate an easy integration of financial literacy into the curriculum, dovetailing seamlessly with platforms like Clever and Google Classroom.
The results speak volumes: Schools and districts using KidVestors have seen a 55% improvement in financial literacy. Our engaging, gamified platform encourages students to attend and learn, helping reduce chronic absenteeism.
Despite no U.S. state currently meeting minimum financial education standards, KidVestors is bridging that gap with a solution aligned with both Jump$tart and NFEC standards—we don't just meet expectations; we exceed them.
Moreover, KidVestors places special emphasis on investing and entrepreneurship. These topics ensure students are financially literate and prepared for the future.
Our Earn While You Learn incentive rewards students for learning milestones, maintaining high motivation and improving financial literacy scores.
Best of all, KidVestors is budget-friendly and easy to implement. You can even request a quote right now—no red tape or long waiting periods.
Get A Quote
(For best pricing, enroll at least 50+ students or more)
How to Advocate for Financial Literacy in Your District
Here are steps that educators, advocates, or parents can take to integrate financial literacy into classrooms and districts:
The lack of financial education can lead to negative outcomes and deepen economic disparities. In underserved communities, the need for financial education is even greater. It can help address systemic economic inequalities. Our mission—"Financial Inclusion For All"—aims for a more inclusive society. Advocating for financial education in schools is essential to creating that reality.
Empowering students with financial knowledge today assures a more prosperous and financially secure future for all.
The Negative Effects of Financial Illiteracy
Not understanding basic financial principles can lead to detrimental outcomes. Here are some negative effects:
Increased Debt: People lacking financial literacy are more likely to accumulate unnecessary debt. This can further entrench them in financial difficulties.
Poor Credit Scores: Without an understanding of credit, individuals may struggle to maintain a good credit score, complicating future major purchases.
Reduced Wealth Creation: Financial literacy teaches the importance of savings and investments. A lack of knowledge leads to missed opportunities for wealth creation.
Limited Career Opportunities: Understanding how to manage finances is crucial for aspiring entrepreneurs. Many miss out on capital and growth opportunities without this knowledge.
Increased Chronic Absenteeism: Without financial education, students may struggle to connect school with real-life success. Financial stress can lead to disengagement, making education feel unimportant.
10 Concerning Financial Literacy Statistics
Understanding financial statistics highlights the urgency of improving financial literacy education.
Debt and Credit
Average Credit Card Debt: The average American carries $6,501 in credit card debt. (Source: Experian, 2024)
High-Interest Debt: Nearly 25% of Americans only make minimum credit card payments each month. (Source: Bankrate, 2023)
Investing and Savings
Investing Knowledge Gap: Only 32% of U.S. adults demonstrate basic investing knowledge. (Source: FINRA, 2023)
Lack of Stock Market Confidence: 70% of Gen Z adults feel unconfident about investing in the stock market. (Source: CFA Institute, 2023)
Emergency Savings Crisis: About 57% of Americans can’t cover a $1,000 emergency expense. (Source: Bankrate, 2024)
Retirement and Long-Term Planning
Retirement Savings Struggles: The median retirement balance for Americans is just $87,000, insufficient for most during retirement. (Source: Transamerica Center for Retirement Studies, 2023)
Late Retirement Planning: 39% of Americans begin saving for retirement after age 40. (Source: CNBC, 2023)
Financial Literacy Gaps
Lack of Financial Education: Only 23 states mandate personal finance courses for high school students. (Source: Council for Economic Education, 2023)
Budgeting Challenges: Nearly 73% of Americans struggle with budgeting. Debt.com
Youth Financial Literacy
Teen Financial Literacy Gap: Only 27% of teens understand how credit scores are calculated. (Source: Junior Achievement, 2023)
Financial Education: The Impact on Underserved Communities
Underserved communities often face unique challenges, lacking financial education. The impact is significant. Here are some key points:
Limited Access: Limited access to financial resources magnifies the need for financial education. It empowers individuals to make informed decisions.
Higher Debt Rates: People without financial knowledge are more prone to accumulating high-interest debt.
Reduced Wealth Accumulation: Lack of financial knowledge hinders wealth-building opportunities, including missing out on potential generational wealth.
Entrepreneurial Challenges: Financial literacy is crucial for entrepreneurship. Without it, individuals may struggle to manage finances and grow businesses.
States Requiring Financial Education in Schools
Mandates for Financial Literacy
Financial literacy mandates are gaining momentum across the U.S. Various states are integrating financial education into school curricula. This step is critical to ensure students receive essential skills.
Note: The status of financial education requirements may have changed since this article was published. Verify with your state's Department of Education for current mandates. Some states may require standalone financial courses, while others allow integration into existing subjects.
Alabama: Mandates financial education as a standalone course.
Idaho: Requires a one-semester personal finance course for high school students.
Kentucky: Mandates a standalone course in financial literacy.
Louisiana: Requires financial literacy lessons as a standalone course.
Missouri: Has a standalone personal finance requirement.
Nevada: Mandates financial literacy as a standalone course.
Tennessee: Requires a standalone financial literacy course.
Texas: Mandates a standalone course in financial literacy for graduation.
Financial Education as an Elective
States requiring financial education as an elective include:
Arizona: Mandates personal finance as an elective.
Georgia: Requires financial literacy in high school economics courses.
Illinois: Mandates personal finance education as part of the curriculum.
Kansas: Requires personal finance as part of graduation requirements.
New Jersey: Mandates personal finance as part of the high school curriculum.
North Carolina: Requires economics and personal finance taught as an elective.
Oklahoma: Mandates integration into the curriculum, available as an elective.
Rhode Island: Requires personal finance to be included in the curriculum.
Utah: Has a financial literacy mandate with flexible delivery options.
10. Virginia: Requires a financial literacy course for graduation, offered as an elective.
11. West Virginia: Mandates personal finance in the high school curriculum.
Empowering Students through Financial Education
Financial education is a critical skill that students should learn in school. It empowers them to make informed decisions, break the cycle of debt, and foster a more economically resilient society.
Empower your students with lifelong financial skills. Learn more about bringing KidVestors to your school or district at www.kidvestors.co.
FINANCIAL EDUCATION & INVESTING FOR KIDS AND TEENS
Enroll your student in our financial literacy course and app here.
If your school or group is seeking a finance curriculum to teach students how to manage money, start here to learn how to bring KidVestors to your classrooms!
Parents, normalize money conversations at home by visiting here.
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