Effective July 1, 2009, Indiana became the latest state to require that each public school and accredited non-public school incorporate financial literacy education into its curriculum. The law was entitled "Dollars and Sense for Hoosier Children." Section 20-30-5-19 of the Indiana code now mandates that instruction concerning financial responsibility be given in grades six through twelve.
This is a good thing. It is widely understood that the 2008-2009 financial crisis was mainly caused by the subprime mortgage crisis, and many believe that the root cause of the subprime crisis was financial illiteracy. Kids need to learn at a young age how business, economics and finance works. Any steps taken to increase the financial wisdom of the next generation will help ensure that we don't experience a repeat situation of millions of borrowers taking out loans that they had no chance of repaying.
Hopefully, the financial literacy training adopted by schools in Indiana will be a program like the excellent one provided by Junior Achievement (JA). JA has age appropriate financial literacy classroom seminars for the entire grade span mandated by this new law. What I like about JA's program is that it is largely based on a small-business / free enterprise approach, with a lot of hands-on reinforcement of basic financial concepts.
There are other financial literacy curricula out there from other non-profit organizations that are also excellent and age-appropriate. Whatever the state and local school boards decide, it will likely be a step in the right direction to ensure a healthy financial future for our children.
Craig Everett is a financial researcher, an advocate for financial literacy, and a board member of Junior Achievement of Greater Lafayette.