The opinions expressed in this piece are solely the author’s and do not necessarily reflect the views of Carolina Journal or its publisher.
How can students be expected to make responsible financial decisions when they are only exposed to financial literacy towards the end of high school? In North Carolina, students are required to take an Economics and Personal Finance (EPF) course before graduating, a policy meant to prepare them for real-world financial responsibility. This was an important addition to the state’s curriculum requirements; however, before many students ever take a seat in that classroom, they have already begun making financial decisions that will have lasting effects on their lives.
A high school junior has already begun deciding where to apply to college and how to pay for it. Others have been working since they were 14 years old, spending their hard-earned cash, managing bank accounts, and even dabbling in investing. When they are 16 and able to drive, they must pay for gas, insurance, and more. Social spending also increases, whether through hanging out with friends, dining out, or dating. These are not just hypothetical scenarios. They are everyday financial decisions made long before a required financial literacy course is taught.
Financial education has been proven through research to positively impact financial outcomes. According to a study in the Journal of Economic Literature by Annamaria Lusardi of George Washington University and Olivia Mitchell of the University of Pennsylvania, individuals who are exposed to financial literacy education are more likely to save, invest, and avoid high debt. Additionally, research by Carly Urban in the Economics of Education Review shows that students who take financial education courses tend to have higher credit scores and lower default rates compared to those who don’t. These findings make it clear that financial literacy is not just beneficial but necessary.
Yet the effectiveness of this education depends on when it is introduced. When financial habits are already developing, a single course taught late in a student’s high school career limits its effectiveness. By this point, students may already develop spending habits, take on debt, or make uniformed decisions. Financial decision-making isn’t a skill that can be mastered over the course of one short class. Rather, it develops through repeated exposure and experience over time.
North Carolina’s current approach reflects this gap. The EPF course is often taught as a capstone class in a student’s junior or senior year. This creates a break between when students begin making financial decisions and when they are taught how to navigate them. Additionally, access to financial literacy education varies across districts because of resource availability, which leads to inconsistencies in how students develop financial skills. Focusing on a single required course overlooks the importance of how financial understanding is built through consistent exposure across one’s education.
However, some believe that financial literacy should not be emphasized in schools, arguing that one only learns to make financial decisions through experience rather than a class. While experience is critical (and high schoolers are gaining much more of this experience than people assume), this perspective overlooks the fact that financial education has proven to lead to better outcomes. Students benefit most when they are given both the knowledge and time to apply it, rather than being left to learn through costly mistakes.
To prepare students for financial independence, it will take more than just a single course taught late in high school. It will require students to be exposed to financial literacy at a younger age, allowing them to gain experience and knowledge before making any large financial decisions. If the goal is to equip students for the realities of being an adult, financial literacy must be taught earlier and be reinforced over time, not after many of these decisions have already been made.