METHUEN — Financial illiteracy is an unfortunate plague among Americans, with only 57% equipped to make informed financial decisions, according to MarketWatch.
While April may be financial literacy month, Massachusetts has earned a C grade by MarketWatch, marking the importance of education-related bills like the one state Rep. Ryan Hamilton, D-Methuen, is proposing.
“When it comes to anything on education in Massachusetts, a C is not good enough,” Hamilton said. “We have to work to get to that A.”
Hamilton is fighting to require financial literacy education for all Massachusetts high school students.
His bill, an act relative to student financial literacy, was reported favorably by the Joint Committee on Education on April 1. It has since been referred to the Senate Committee on Ways and Means.
“There’s still a lot of bars that we need to clear,” Hamilton said. “There’s still a lot of work for us to accomplish.”
The act would require all public high school students to complete a standalone financial literacy course prior to graduation.
Students would study a variety of topics, like investments, managing debt and building good credit.
The bill calls for a financial literacy trust fund, which would provide funding to underserved school districts. The act also directs the Department of Education and Secondary Education to create professional development training standards for educators.
The act’s language, however, says school districts “may incorporate the financial literacy standards” into existing curriculum.
Other topics students would learn in the course include earning and spending income, charitable giving, methods of payment, consumer protection, balancing ledgers and checkbooks, budgeting, the role of banks, long-term savings, credit, investments and emerging technology like crypto.
Students would be required to take at least a half of a semester’s credit of coursework on the topic.
Pennsylvania became the most recent state to guarantee a standalone half-credit course in financial literacy. The Keystone State became the 25th in the country.
Other states that have passed regulations for some form of financial literacy course within the high school level include Wisconsin, Oregon, Louisiana, New Hampshire, Connecticut and West Virginia.
“I think we have a good shot at becoming that 26th state,” Hamilton said. “I’m not the only one working on it. We’ve been really working together.”
States that have passed financial literacy regulations, including West Virginia, Oregon, Minnesota, Indiana, Florida, and Nebraska, all have A grades from MarketWatch.
“Financial literacy is crucial nationwide as it empowers individuals to achieve financial stability, avoid pitfalls that lead to hardship, and participate in economic activities like investing,” said David Straughan, personal finance writer with MarketWatch Guides.
Massachusetts received a C because the state has some standards for financial literacy, but nothing is required or necessarily offered as a standalone course. Hamilton said the C is an improvement from an F grade a few years ago, but that he still would like to see the state get to an A.
A recent MarketWatch Guides survey found that more than half of Generation Z were unfamiliar with CDs, high-yield money market accounts and Roth IRAs. The average American lost $1,506 in 2023 due to financial illiteracy in credit card interest and fees, overspending and fraud.
“Implementing a stand-alone financial literacy course requirement in high schools is a proactive step that could significantly benefit students and their communities,” Straughan said.
“While it may not be the end-all solution, equipping students with personal finance knowledge and skills could contribute to improved financial resilience and decision-making within families over time, as these abilities are passed down generationally.”
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