Financial Lit 101

High schoolers in many states would not be able to pass a financial literacy test. Why? Because they are never given one.

Most states have no requirements for students to take a financial literacy course in order to graduate from high school, according to the Center for Financial Literacy at Champlain College in Burlington, Vt. D.A. Davidson & Co., a financial services firm based in Great Falls, Mont., is trying to help fill that educational gap.

Champlain College rated the 50 states and the District of Columbia on the basic financial education each provides for high school students. Only five received an “A” grade. These states—Alabama, Missouri, Tennessee, Utah and Virginia—require students to pass a six-month course on personal finance in order to graduate from high school, according to Champlain’s 2017 National Report Card.

Twenty-seven states received a grade of “C,” “D” or “F.”

“The youth of America need to learn, even before entering college, how to develop the lifelong habits necessary for a healthy financial life,” said Donald J. Laackman, president of Champlain College. “High school is a particularly important time in the lives of young American students, who soon will be faced with decisions regarding credit, rent, salaries, major purchases and education loans.”

D.A. Davidson, which has offices nationwide, created a pilot program in Southern California this past summer to see how much interest there would be in summer classes in finance among teenagers. The program was so successful for both teenagers and the advisors who volunteered as teachers that it is being expanded next summer, says Andrew Crowell, vice chairman of D.A. Davidson & Co. Wealth Management in its Los Angeles office.

“This program was born out of our company’s desire to make an impact in our Southern California market on the lack of financial literacy among youth,” Crowell says. “We married what we as advisors do every day with a known need.”

Schools today teach a core curriculum that does not include finances, so students do not have the exposure to things like balancing a checkbook, borrowing money, interest rates, and renting versus buying, he says. “This program, known as Moneywise, is a meaningful way to give back to the community.”

D.A. Davidson partnered with the YMCA of Metropolitan Los Angeles, which has a program called “Get Summer” that’s focused on youth activities from June through August.