The Assembly Education Committee on bi-partisan support approved AB 166 authored by Assemblymember Roger Hernández (D-West Covina). The bill would improve financial literacy instruction in high schools statewide.
“The growing negative effects of financial illiteracy, such as the housing mortgage crisis and a low national savings rate, have spurred the need for financial literacy education. As of now, California does not have an official state policy or educational plan for the teaching of financial literacy,” said Hernández.
Research from the Council for Economic Education found that students from states where a financial education course was required had the highest reported financial knowledge and were more likely to display positive financial behaviors and dispositions. Students who had taken a course in personal finance were more likely to go on to save money, pay off a credit card bill in full each month, and less likely to be compulsive buyers, max out credit cards or make late payments.
Currently, 46 states report having personal finance standards in various forms, while only 13 of those states include personal finance instruction as part of their graduation requirements. California has neither.
“Financial literacy is an issue of equity. Not everyone is given an opportunity at home to be financially literate. Teaching this topic at schools prepares our students to enter an increasingly competitive workforce and gives them the tools to help protect themselves against predatory lending, credit card fraud and other deceptive practices,” added Hernández.
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