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Last month, as April and the yearly flood of financial literacy articles were just around the bend, the Wall Street Journal in a headline posed this not-so-new question: Should college students be required to take a course in personal finance?

I applaud any attempt to raise awareness around the crying need for financial education—and to stir the debate. But this question and, frankly, the responses from two prominent thinkers in the space miss the mark.

Annamaria Lusardi, Denit Trust chair of economics and accountancy at the George Washington University School of Business, and Lauren Willis, professor of law at Loyola Law School in Los Angeles, take opposite sides. But neither point out that the real solution is not a single class but lifelong financial education that starts as early as pre-kindergarten and continues through elementary, middle and high school, and college.

To be fair, my guess is they were asked to address the question in the headline and not meander all over the issue. And Willis, who always revels in taking the “no” side of this debate, sees pretty much all financial education as futile. In her view, financial products change too fast and even educated consumers are no match for “the salesperson across the table.”

I disagree with Willis completely, of course. On the narrow question posed, I will take Lusardi’s side all day long. She likens sending young people into the world without financial knowledge to letting teens drive without getting a license. It’s dangerous for everyone. A financial literacy class should be required in college.

But my bottom line is this: Anything worth teaching kids is worth teaching more than once. Shaping money behavior is easier than changing money behavior and, as the research indicates, “early” and “often” financial education works.

“We would never expect adults to be competent at reading or mathematics if those subjects were not introduced early,” writes Mark Schug, a nationally recognized financial and economic education scholar. “In the same way, economic and financial education ought to start early and be repeated often.”

Many adults think money concepts are beyond a child’s grasp. But this is a misconception. An important study in the spring issue of Journal of Private Enterprise confirms that elementary school students are not only able to understand key concepts about finance and economics, but are eager to learn.

The study from Schug, Mary Suiter at the Federal Reserve Bank of St. Louis and Eric Hagedorn at University School of Milwaukee tested 2,500 Chicago-area third graders before and after a six-week financial literacy course. It confirms what some financial experts have been saying since the 1960s: children can and want to learn about money. The third graders’ attitudes and knowledge about money improved significantly after completing the lessons.

“Children can make progress toward becoming financially literate,” Schug writes. “This finding is important…We have evidence that children across grades K–8 can make gains in their economic and financial understanding. All we need to do is teach them.”

The study, using a curriculum we developed at Money Savvy Generation and which has been used in Chicago Public Elementary Schools for eight years, focuses on four core components of financial literacy: saving, spending, giving, investing. It teaches goal-setting skills around each one.

Many children start to receive gifts or allowance at a young age. They know they can save their money, and they know they can spend it. But the study shows they are ready to learn so much more.

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Written by Susan Beacham
Susan Beacham founded Money Savvy Generation in 1999 after almost two decades in private banking and investment management complemented by considerable time teaching at the elementary level.

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