OPINION: Schools should teach teens basic financial literacy

This editorial was published in The Columbian of Vancouver, Wash.

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It’s hard to find time in the school year for everything a student should learn before graduating from high school. Practical education courses we remember from high school, like home economics and shop, have long since been de-emphasized. Today’s favorite subjects include fine arts and STEM curriculum, which emphasizes science, engineering and math, in order to interest students in engineering and electronics.

But the 2025 Legislature would do well to consider a bill that would encourage students to learn basic financial literacy. Senate Bill 5080 has been prefiled by Sen. Javier Valdez, D-Seattle, in partnership with newly elected Sen. Adrian Cortes, D-Battle Ground, a teacher. If passed, it would make financial education available in every Washington school district by the 2029-30 school year.

If the idea sounds familiar, it’s because state Treasurer Mike Pellicciotti has been promoting it for several years. Last session, similar bills passed both the Senate and the House but ultimately didn’t make it through the reconciliation process. One version made it a requirement for districts to offer the class, while the other would make it a requirement for students to pass the class. Either would be an improvement.

“Financial matters impact us every day,” Pellicciotti said recently. “Whether we’re just trying to make household budgets go a bit further, pay all our bills or applying for home, student, or car loans, being empowered with the knowledge to achieve those goals must be a part of our education system. Basic financial knowledge is absolutely essential not only to aid Washingtonians in navigating increasingly complex financial systems, but also as a pathway to quality employment opportunities in accounting, banking, and financial services which exist in every corner of our state.”

He’s right, of course. Americans’ credit card debt reached a record $1.17 trillion in the third quarter of this year. That was before the typical U.S. consumer racked up another $1,181 on their credit cards this Christmas, according to a Lendingtree.com survey reported by CNBC.com. Pellicciotti has cited surveys showing that two-thirds of millennials are not saving for retirement. Clearly, some younger people could use more education about high-cost debt, not to mention how to pay for college or a wedding.

Currently, Washington requires districts to offer students access to financial education, but it doesn’t specify what that means. Nor is taking the courses a requirement. The state schools agency does define financial education as learning about spending, saving, credit, debt, employment, income, investing, risk management and financial decision-making. These topics are relevant to all consumers and should be widely taught.

Recently elected to a second term, Pellicciotti, a Democrat, has been unusually active on consumer financial issues. Last year, he successfully championed the Washington Saves program. Taking effect in 2027, it allows Washington workers without a work-based retirement plan to set up individual retirement accounts and contribute to them through payroll deductions. Workers don’t have to contribute; it’s optional. And employers are not required to contribute, unlike a 401(k) retirement program. They just have to offer the payroll deduction.

Financial education doesn’t mean young people will make good decisions about money. But at least they’ll have the information to know before they make a bad decision.

TNS