Guest Column: Washington Schools Should Teach Financial Literacy

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As a society we offer students 13 years of instruction — over 13,000 hours. The high school diploma costs more than $170,000 for each student. But what does a diploma mean? 

At the very least it should mean a young adult is ready for the challenges of living in a free market society. It should include learning how to manage one’s personal finances. As our society grows more complex, the importance of financial literacy is even more important if one is to avoid financial pitfalls.

Young adults are not typically taught about credit cards, mortgages, banking, investments, insurance products, payday lending, housing purchasing options, credit reports, long-term financial planning and how to comparison shop for major purchases. They should learn about these subjects, but also about the best practices like delaying gratification, long-term planning and budgeting to live within one’s income.

Personal finance education offers young adults the knowledge and skills to manage their financial resources effectively for a lifetime of financial well-being. Missing this important instruction can have real consequences.

The National Bureau of Economic Research conducted a study and found that individuals with lower levels of financial literacy tend to make expensive mistakes in their transactions, use high-cost borrowing and have excessive debts.

Financial knowledge produces individuals who are more likely to make sound decisions about how to use their money and achieve long-term financial security. Some have suggested that one element of wealth inequality is the disparity of financial knowledge. Perhaps financial literacy is even a strategy for breaking the cycle of poverty.

However, financial literacy is not only important because the individual is going to prosper. Our society as a whole reflects a decaying understanding of the principles of wise financial practices.

I see an increased comfort with reckless financial behavior and a disregard of hard facts about “free” things. People seem to have lost the ability to recognize the flaws of deals that are too good to be true, and many allow their appetites to dominate decisions.

Today few believe that the $20 trillion debt of the federal government is of concern. Many seem to feel that somehow, someday it will be managed, but nothing needs to change today. The more educated recognize that the growing interest payment obligation of $440 billion per year does choke our opportunity, and will crush future generations.



If more people learn good financial sense, such wisdom can become part of the culture of government. A successful future for everyone is dependent on sound understanding of finances becoming common sense.

Centralia School District is beginning to redesign the requirements for a diploma. The range of classes is being enhanced, and some new expectations are being added. We had the opportunity to require instruction in personal finance.

I am disappointed that we did not make a sound foundation in financial literacy a required quality of those holding a Centralia diploma. I believe our school diploma would have been extraordinary if it meant that students had learned practical life skills to improve their financial success.

However, the district leadership team believes in the importance of these skills, and there are several ways personal finance education can be incorporated into our system of schooling in Centralia. I would like to continue to work on making financial literacy a feature of a Centralia education.

I invite those who want to see stronger personal finance education in Centralia to contact me to help with this effort.  As a community we can improve our district’s preparation of the next generation.

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Jami Lund serves on the Centralia School Board of Directors and is an education policy analyst for the Freedom Foundation. He can be reached at jami@jamilund.com or 360-918-3990