Adults now can struggle with finances, so how will future generations fare if they don’t have sufficient knowledge? State leaders have stepped in by pushing for financial literacy in schools. A 2024 law has officially changed California’s graduation requirements to include this subject. Here’s what you need to know.
Gov. Gavin Newsom recently signed Assembly Bill 2927, which requires high schools to include a financial literacy course starting in 2027. Therefore, the class of 2031 will be the first to graduate with this requirement. The bill entered California’s legislature in February and took about four months to pass. Now, the governor’s signature marks a significant step toward financial education for future generations.
“We need to help Californians prepare for their financial futures as early as possible,” Newsom said in a June statement after meeting with other state leaders. “Saving for the future, making investments, and spending wisely are lifelong skills that young adults need to learn before they start their careers, not after.”
California leaders hope learning these financial skills and concepts will help students feel more confident and capable in the future. Education officials are working on the curriculum now to prepare for the 2027-2028 school year. Reports indicate the course will include education on credit cards, interest rates, identity theft and other critical financial topics.
Loan literacy would be a critical component of the financial literacy course, as teenagers often require financial aid to afford college. The Public Policy Institute says the U.S. has $1.6 trillion in student loan debt, with 3.8 million Californians holding above $142 billion. With loan education, students would feel more empowered to decide about college and how they’ll pay for it.
While science and the other core subjects are critical, there are some real-world topics students might need to learn more about in grade school. Introducing a financial literacy course is an excellent step toward building a solid future for California students. Here are three ways the curriculum would benefit them.
Finances may seem straightforward, but students can learn a lot by taking a class. When they take the course, they build a growth mindset and help themselves in other subjects. Experts say this concept allows teenagers to set goals and sets them up for success. With a growth mindset, kids can better prepare for their time in college and in professional workplaces.
Finances are challenging to manage, especially for the 65% of Americans living paycheck to paycheck. A financial literacy course would set students on a better path by introducing them to essential topics. Then, they have more confidence when tackling them in real-life situations. For example, the course could teach about budgeting and savings accounts. With a set spending limit, students can build wealth with intelligent planning.
The financial literacy course could also educate students about the principles of investing. Small and wise investments in your teens and 20s could lead to better retirement funds later in life. Research from the Federal Reserve shows only 31% of Americans view their retirement savings as on track. In this class, the kids could learn about the risk levels of different investments and their long-term implications.
The financial literacy course lets California join the other states that have introduced such education. A 2024 Council for Economic Education survey found 35 states required personal finance courses to graduate high school. From coast to coast, financial literacy has become a priority for states and their students.
The push for financial education has become noticeable in the past two years. Twelve states added personal finance requirements in 2022, letting an additional 21% of all American students take advantage of these curricula. California has over 1.6 million high school students, so each class would produce even more financially educated students for the United States.
Before enacting this law, California schools included economic education but not personal finance classes. Now, the state’s education system will add a financial literacy course to its high school curriculum. Learning monetary skills helps students make better decisions and build a better fiscal future.
