Walk into Tamekia Davis’s 11th-grade classroom and you may see students’ desks covered in beans—but it’s not a cooking class. Davis is teaching financial literacy. “The beans will represent your salary,” announces Davis, a teacher at Parkdale High School in Maryland, causing a few heads to turn. “And you’re going to have to decide where you are going to spend this money.”

With this unusual task in hand, students huddle together in pairs to make difficult decisions. Should they spend one bean to ride the bus or three beans to buy a used car? And what about food—cook at home for two beans or eat out for four? This bean-based crash course in budgeting not only is fun; it’s also an example of a relatively simple lesson that introduces students to key concepts in personal finance.

But how effective are finance lessons, really? When kids are introduced to complicated financial topics like compounding interest rates, savings accounts, or personal and business taxes, does the information just go in one ear and out the other?

Research Points to the Benefits of Teaching Financial Literacy

New research from Vermont’s Champlain College is unequivocal: Financial literacy lessons have an “overwhelmingly” positive impact on students’ future financial habits, from budgeting and saving to avoiding predatory loans, according to their 2023 report on nationwide high school financial literacy. In fact, the effects on students’ financial well-being are detectable over a decade after graduation.

In their report, Champlain College’s researchers assigned U.S. states letter grades based on their commitment to high school financial literacy. An A meant that the state required “personal finance instruction as a graduation requirement that is equal to a one-semester, half-year course” at the high school level. An F, meanwhile, indicated that the state had “virtually no requirements for personal finance education in high school.”

Only seven states received an A. A plurality received Bs, while five states—including California, home to one of every eight high school students in America—got an F.

Read the full article about teaching financial literacy by Daniel Leonard at Edutopia.