N.H. ranks 18th when it comes to high school budgeting instruction

With more than 9 in 10 Americans agreeing that budgeting should be taught in schools, the personal-finance website WalletHub today released its report on the States With the Best Budgeting Education in High School, to identify where students are most prepared to make good financial decisions.

WalletHub compared the 50 states and the District of Columbia using 11 key metrics, which range from whether students are required to take a personal-finance course to financial literacy test scores to overall school rankings.

To view the full report and your state's rank, please visit:
https://wallethub.com/edu/states-with-the-best-high-school-budgeting-education/145208



"All high schools should have mandatory personal-finance education, including instruction in budgeting. Students who learn to budget before they join the workforce will be able to make much better financial decisions. They will also be able to save more for the future and are likely to have higher credit scores than their peers who never learned how to budget or who had to figure things out on their own without instruction."
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"Utah schools have the most robust budgeting education, in part because students are required to take personal-finance and economics courses during high school. Utah also conducts standardized testing on both personal finance and economics. To top things off, Utah has the highest share of eighth-graders who are proficient in math, which means that they are well prepared to start learning about financial concepts in high school."

- Chip Lupo, WalletHub Analyst


Expert Commentary

What are the most effective ways to teach personal finance in high schools?

"Personal finance should be a mandated subject in high schools, not just an optional module that students choose whether to study or not. For it to be more effective, financial literacy should be taught in conjunction with issues pertinent to the student's immediate future. From what I have seen in the classroom, urgency with a real-world connection allows students to engage much deeper and meaningfully. The actual cost of college, understanding student loans, and income management of their first job are examples that students can relate to and act upon. Financial literacy taught in isolation doesn't work; it must be blended into real decisions that students will likely make two or three years after graduation. This is the best way financial educators can work to create lifelong habits amongst students."
JC Phelps, PhD, MBA - Instructor of Business Administration, Lindsey Wilson College

"I have taught personal finance at the college level. To capture the attention of our students, we need to make it personal. Have students think about their background, experiences, values, and goals. When they have this perspective, they understand the 'why' of spending and saving."
Lora J Reinholz, MBA, CLU, CFP (r), ChFC, CASL, WMCP - Instructor of Practice, Marquette University


What are the long-term benefits of budgeting education for youth?

"Guiding an individual through budgeting tasks imbues students with a sense of agency over their activities. Students equipped with these abilities tend to manage financial crises better, are less likely to fall into cycles of debt, and have a better chance of accumulating wealth over the years. While this is important on the micro-level, there are also macro-level economic benefits to this as a nation. Additionally, we cannot ignore that psychological well-being is a noteworthy advantage, as mental health is correlated to financial circumstances. Acquiring these skills at a young age enables students to become financially literate at a most pivotal age."
JC Phelps, PhD, MBA - Instructor of Business Administration, Lindsey Wilson College

"When students are aware of how and why they are spending their money the way they do, they can be deliberate with each transaction. They, their families, and their communities benefit because they learn both the impact as well as the consequences that saving or spending provides so they can be more likely to stay within their budget, use their money to reach their long-term goals, and reduce impulse shopping."
Lora J Reinholz, MBA, CLU, CFP (r), ChFC, CASL, WMCP - Instructor of Practice, Marquette University


What should financial education classes cover?

"Financial literacy should cover more than just the guidelines of a budget. A student should know the Time Value of Money, why early retirement saving is essential, and that a dollar earned today will go farther than one earned in the future. Principles such as compounding interest, the basics of investing, responsible debt, emergency funds, taxation, and credit should be accompanied by real-world applications. Lastly, the mental impacts of bad finances need to be addressed. A student should learn to deal with the unfortunate truth that managing a budget puts enormous strain on almost all areas of one's life, and having good financial habits is beneficial for personal wellness over time."
JC Phelps, PhD, MBA - Instructor of Business Administration, Lindsey Wilson College

"At the very beginning, we need to have students think about their background, experiences, goals, and values. If we recognize where we come from, then we can use our money as a tool in ways that address our key values. We can be more deliberate with our actions. In addition, we need to focus on budgeting. Not just creating hard limits in spending, which can be intimidating, but instead identifying how much money we are allowing ourselves - yes, giving ourselves permission - to spend in certain areas. Other incredibly critical areas to cover include: Credit, both good and bad types and their long-term effects...Major purchases, such as cars and homes...Insurance, including life, disability, health, auto, renters, home, and umbrella and the importance of effectively using riders and replacement value...Investments, focusing on steps to prepare for investing (such as having an emergency fund and paying off credit cards), types of accounts, and investment allocations...Long-term planning, such as education and retirement planning, and features of the accounts available (especially Roth IRA and Roth 401(k)!)...Estate planning, especially addressing the need of having Powers of Attorney to provide authority for parents to access medical and financial information for young adults who are at least 18 years of age."
Lora J Reinholz, MBA, CLU, CFP (r), ChFC, CASL, WMCP - Instructor of Practice, Marquette University


5 Tips for Learning About Budgeting

1. Take classes: Even if your high school didn't offer courses on budgeting or personal finance, it's not too late to take a class! You can take a course from your local community college, or take online courses from various schools or even organizations such as AARP, in order to improve your knowledge of key financial concepts.
   
2. Read articles: There are tons of free resources online that can teach you how to make a budget and why it's important. Making a budget isn't hard - you just need to be aware of the basic steps.
   
3. Talk to friends and family: Discussing personal finance and budgeting with your friends and family can help you expand your knowledge and find out what strategies work best for other people. You can also ask people close to you to help keep you accountable once you do have a budget.
   
4. Try online tools: Many apps allow you to create a budget for free online, and they may even be able to sync with your accounts to track your progress in real time. You may even be able to choose from a few different budget templates, which can make budgeting as easy as just plugging in a few numbers.
   
5. Test your knowledge: You can take a financial literacy quiz to see how much you already know and identify the areas where you need to expand your understanding.