Why credit unions should champion financial literacy in schools
Photo by Max Fischer
Financial literacy is essential to prepare students for life beyond school. From buying their first car to saving for a home and planning for retirement, these are real-world responsibilities that every young adult will face. However, while students may graduate understanding atomic structures, many struggle to explain the difference between a credit score and a baseball score. Financial knowledge that impacts their future is often lacking, leaving them ill-equipped for the demands of adult life.
The current state of financial education in North America
Financial education in schools varies significantly between the United States and Canada, with both countries lacking a standardized, nationwide approach.
United States – As of 2024, 35 states require high school students to take a course in personal finance to graduate, an increase from previous years. However, the implementation and quality of these programs differ widely. Some states mandate standalone personal finance courses, while others integrate financial literacy into existing subjects like economics or mathematics. This inconsistency leads to disparities in the depth and effectiveness of financial education across the country.
Canada – In Canada, education is managed at the provincial and territorial levels, resulting in varied approaches to financial literacy. For instance, Ontario has incorporated financial literacy into its curriculum through math courses from grades 1 to 8 and a mandatory Grade 10 Career Studies course. British Columbia overhauled its financial education approach in 2018, integrating it primarily into math courses from kindergarten to Grade 12. Despite these efforts, there is no universal policy, leading to inconsistencies in how financial education is delivered across provinces and territories.
In both countries, while progress has been made to include financial literacy in school curricula, the lack of uniformity and varying quality of instruction mean that many students still graduate without essential financial skills.
Essential life skills that financial literacy teaches
Somewhere between the 1840 Treaty of Ghent and the Pythagorean theorem, we need to make room in the curriculum for real-life financial topics. Here’s why financial literacy matters:
Essential life skills: Teaching financial literacy equips students with key life skills like budgeting, saving, and investing, fostering independence and security. This preparation helps young adults manage real-world responsibilities, like taxes, loans and insurance, easing their transition into adulthood.
Economic stability: Financial education reduces the risk of debt by promoting responsible financial decisions and savings habits, building a foundation for long-term economic stability.
Empowering informed decision-making: Students learn critical thinking in finance, helping them assess risks, avoid scams and make informed decisions in investments and loans, which safeguards them from financial exploitation.
Improving economic outcomes: Understanding compound interest, investments and homeownership benefits students by fostering wealth-building habits and guiding major financial decisions, like buying a home, for lasting financial security.
Fostering responsible citizenship: Financial literacy strengthens civic engagement, enabling students to understand taxes and fiscal policies, making them more informed voters and contributors to the economy.
Social equity and inclusion: Early financial education bridges economic gaps, empowering underserved communities and reducing reliance on high-cost financial services, fostering social equity.
Enhancing mental and emotional well-being: Financial literacy reduces stress by providing tools to manage money effectively, promoting financial security and encouraging healthy financial habits like avoiding lifestyle inflation and planning for long-term goals.
Supporting studies on financial literacy and math skills
Research supports the theory that financial literacy strengthens both math skills and financial understanding. For example, a study in the Journal of Financial Counseling and Planning found a strong association between numeracy and financial literacy, showing that math skills are foundational for financial understanding. Similarly, research in the Journal on Mathematics Education showed that students exposed to financial literacy programs improved their problem-solving and reasoning skills, reinforcing the value of practical financial education.
Why and how credit unions should get involved
Credit unions are a natural partner when it comes to community financial education. Not only are they financial institutions, but their mandates are also built around community collaboration for social and economic benefits. Credit unions benefit by establishing themselves as trusted community partners, fostering financially literate communities, and building relationships with young adults who may become lifelong members. Programs that build real-world skills yield long-term rewards, both culturally and financially.
It’s a Money Thing
For over a decade, Currency Marketing has partnered with credit unions across North America to provide professional-level financial education through It’s a Money Thing. Our program, designed to be engaging and relatable, offers 40 topics rooted in real-world applications, equipping youth with essential skills for a financially secure future. By making financial education accessible, fun and practical, It’s a Money Thing can help credit unions play a pivotal role in building financially literate communities.
Tim McAlpine is the Founder & CEO of Currency Marketing. He is best known for developing the It's a Money Thing Financial Education Program that credit unions from around North America are using to connect with new young adult members. He is also a driving force behind CUES Emerge, an emerging leader program that combines online learning, peer collaboration and an exciting competition component.
