[Column] We need to teach personal financial education in our high schools

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Earlier this summer, as the annual budget grabbed the daily headlines, a noteworthy bill was passed out of the Senate Education Committee in late June. Senate Bill 1243, of which I am the primary sponsor, would necessitate the completion of a full-credit economics and personal finance course as a high school graduation requirement in Pennsylvania.

The most recent estimates state there are more than 350 million American-owned credit card accounts, and, on average, credit card owners have about four cards apiece. All of this spending has accumulated to astonishing levels of debt. In general, Americans are nearing approximately $1 trillion dollars in credit card debt and more than $15 trillion dollars in total debt. To make matters worse, today, our society is littered with predatory lenders, phony investment schemes and exploitative swindlers who target our most vulnerable citizens who lack the education to see the long-suffering shortcomings of these contracts.

Unfortunately, an alarming number of our high school students are currently entering adulthood and the workforce without an appropriate knowledge of basic financial concepts such as credit scores, student loans, home mortgages, compounding interest, saving for retirement, or borrowing money for a large purchase . It is imperative for our youth to learn that there are indeed consequences for this unabashed spending. Far too often, the financial decisions our younger generations make early in their lives lead to unintended consequences that have put them at an economic disadvantage. Due to this reality, a cycle of poor money management decisions burden our citizens, the Commonwealth and ultimately the taxpayer.

Growing up, many of us obtain financial insights from our parents, family members and neighbors, who teach us how to write a check or open a banking account. However, this informal teaching leaves glaring gaps in the necessary financial education needed to succeed. Understanding the importance of maintaining a good borrowing history, paying your bills in a timely fashion and saving early for retirement are not easy concepts to grasp. Yet, a poor credit score can severely limit an individual’s opportunities later in life. These critical ideas need to be taught both at home and in our high schools.

Senate Bill 1243 helps address this gap by creating a standalone class covering the importance of credit scores, APR for student loans and home mortgages, budgeting, compounding interest, saving for retirement, calculating and filing taxes, and other basic financial concepts. From daily purchases to long-term financial planning, becoming proficient at money management is a critical skill all Pennsylvanians need.

This is not a problem unique to Pennsylvania; other states are taking the lead in addressing the issue. Earlier this year, Gov. Ron DeSantis signed into law the Dorothy L. Hukill Financial Literacy Act, which will begin with students who enter ninth grade in the 2023-24 school year or later. The evidence demonstrates that classes like these make a real impact. A recent national survey showed that North Carolina high schoolers rank first in financial literacy after the state created a personal financial economics course for freshman students starting in 2020. It is our duty to act swiftly so our children will not be handicapped as they enter adulthood and start families of their own.

Requiring a financial literacy course here in Pennsylvania will empower our youth and give them the skills to accomplish their personal life goals. This legislation is an investment in the Commonwealth’s financial future. By teaching high school students the financial basics, they will be able to make better decisions to position themselves for a lifetime of success and financial independence. Senate Bill 1243 is a practical, bipartisan and commonsense measure that will make a real tangible difference in the lives of many Pennsylvanians.

Senate Bill 1243 is currently on the Senate calendar for the fall and will then proceed to the House of Representatives for consideration. I sincerely hope the governor is able to put his signature on this important legislation before the end of the year.

Sen. Chris Gebhard represents the 48th Senatorial District, covering all of Lebanon County and parts of Dauphin and York counties.

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