States Mandating Financial Literacy by 2023

Posted by Matin Varshochi in EducationAugust 7, 20225 min read
Key Takeaways
  • According to a study conducted by the Milken Institute, 57% of Americans are financially literate.
  • As just more than 50% of Americans are financially literate, states have begun taking steps to mandate financial literacy courses as part of their graduation requirements. 
  • As most of these implementations will not occur until 2023, below are some financial tips you can teach your children.
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Financial terms such as investing, diversification, and credit score should be common knowledge for everyone. However, despite the importance of knowing these financial terms and becoming financially literate, the current school curriculum does not have any courses which promote this essential life skill. Consequently, the lack of financial literacy has led to some states including personal finance education within their curriculum by 2023. 

Why States Are Mandating Financial Literacy


Many high schools require students to complete a personal finance course before graduation because many Americans currently struggle with their finances. According to a study conducted by the Milken Institute, only 57% of Americans are financially literate. 

For the other 43%, this means they do not have a competent financial education, so they may struggle with making the best financial decisions. Consequently, to help increase the number of financially literate Americans, many states have begun implementing personal finance classes as part of their graduation requirements. 

Some materials in high school courses can be difficult to transfer into real life. Tim Ranzetta, the co-founder of Next Gen Personal Finance, said that "no student leaves a personal finance class wondering how they will use this in their real lives." the meaning of this quote is the main benefit of adding mandatory financial literacy classes allows students to receive access and improve key life skills. 

Which States are Mandating Financial Literacy


Currently, only seven states require personal finance courses to be taken. The states are Alabama, Mississippi, Missouri, North Carolina, Tennessee, Utah, and Virginia. 

Furthermore, another four states will be implementing personal financial education in the future: Florida, Nebraska, Ohio, and Rhode Island. 

Lastly, there is only one state currently in the process of implementing personal finance courses, which is Iowa. 

So far, 21 states have 43 bills written regarding incorporating financial literacy into their curriculum. It is great to see that nearly half of the states are taking steps to help improve their students’ financial literacy. However, although these initiatives are being taken to benefit children, some steps need to be taken at home to further your children’s understanding of financial concepts. 


Key Financial Concepts to Teach Your Children


As 2023 is a couple of years away, it is best not to wait until the schools introduce different financial literacy concepts. As a result, below are some basic but important concepts you should teach your children. 

Recommended Read: How To Educate Your Children About Finances


father and daughter

Image Credit: Prostock-studio /


Invest for the Long Term


Some people have a false idea about investing, believing it is the same thing as gambling. In some ways, investing can be like gambling, but only when insufficient research is done before investing. However, the key thing to remember about gambling is that the odds are stacked against you, and there is a low chance of success. 


With investing, there is a decent chance of financial success when it is done correctly. The critical thing to note about investing is the investments made should be for the long term, not for a quick flip. When you try to make short-term investments in hopes of getting rich quickly, there are a lot of risks involved, and it usually results in your investment lowering in value.


long term investment

Image Credit: Olivier Le Moal /

Therefore, the main message to pass on to your children about investing is to make investments in hopes of making a significant return in the long run. When investments are made in hopes of long term gains, compound interest can help play a significant role in allowing your money to rise exponentially over a period of 10, 20, 30, or more years. 

When investing, the key thing to do is balance risk and reward. When the risk does not outweigh the rewards, investment is not worth it, and vice versa. As there are many ways to invest, it can be difficult to determine the best option. 


As a result, most investors begin with small investments that have little to no risk, such as stocks and treasury bonds. Once an investor becomes more seasoned, they may break into larger projects such as real estate.

Setting Money Aside for Emergencies


When a person begins making money, one of the first things that should be done is to set money aside for a rainy day. As a result, tell your children that once a steady income begins coming in, put a portion of it in a savings account.


putting in emergency jar

Image Credit: Deemerwha studio /


The emergency fund should contain three to six months’ worth of living expenses and be utilized when a financial emergency arises. Having money in reserves gives you a higher chance of overcoming financial difficulties without experiencing additional financial burdens.

Paying Off Debt


One thing that can negatively impact a person’s net worth is the amount of debt they have. Whether that be through the form of student loans or a mortgage, at some point, a person will take on debt. Therefore, the main lesson that should be taught is to pay off outstanding debt as soon as possible. By paying off the outstanding balance quicker, your financial position is less likely to be negatively affected.


couple looking at bills

Image Credit: Cast Of Thousands /


Using Credit Cards Wisely


One of the biggest issues people make is misusing credit cards. Although credit cards are a great way to build credit which will eventually help them receive a mortgage for a house, they can have serious financial consequences when they are misused. 


Recommended Read: Americans Rely More on Credit Cards Due to Inflation

When a credit card is used excessively to the point where the outstanding balance cannot be paid off, that becomes a major issue as the high-interest rates will make it extremely difficult to pay it off. 


As a result, the main credit card lesson to be taken away is to only use them when you know you can pay the money back. When you begin using them incorrectly and excessively, that is when the card can get maxed out and could begin the vicious cycle of credit card debt

How CapWay Teaches Financial Literacy


CapWay believes that everyone should receive access to a financial literacy course. Having an in-depth understanding of financial literacy will help people and their families in taking steps to create generational wealth. To help people of all ages receive access to essential information on steps they can take to improve their finances, CapWay is offering access to a FREE 4-week Phunds Program. 

The Phunds program will contain various topics, ranging from investing to budgeting and how to lead a better financial lifestyle. Therefore, if you wish to embark on this journey of becoming more financially knowledgeable, click here to get started. 

The Money Wrap-Up


Financial literacy is a skill that everyone should have access to. Fortunately, many states are taking steps in the right direction to ensure students are learning about personal finance, so they begin making more financially aware decisions once they become older. Although schools are stepping up in a significant way to ensure students benefit from this new implementation, teaching these concepts more in-depth at home will help boost the chances of your children’s financial success. 


Main Image Credit: Monthira /

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