Financial Education in Minnesota Schools Could Help Reduce Economic Disparities

Hodan Hassan lives in one of Minnesota’s most diverse areas.

His Minneapolis neighborhood includes East Africans, Native Americans, Blacks, Whites, and people of other ethnic and racial backgrounds.

Hassan immigrated from Somalia more than two decades ago. She is a self-proclaimed mental health clinician and social justice advocate who also represents the Minnesota House Region as a DFL state representative.

Hassan worries that many of his younger constituents and other Minnesota students aren’t getting enough information in school about how to handle money.

“I finished high school knowing nothing about personal finance,” said Hassan, 40, who said he learned the hard way.

Rep. Hodan Hassan, DFL-Minneapolis, wants a personal finance course to be a graduation requirement for Minnesota high schoolers.

Mark Zdechlik | MPR News

“I went to college and got into a lot of debt, and I thought I was the only person who had trouble managing my personal finances,” Hassan said. “Then I talked to some of my friends who are either immigrants or communities of color, and I realized that a lot of us were struggling with that because money is not something you talk about families with disadvantaged socio-economic conditions.”

There is no requirement in Minnesota that students take a stand-alone personal finance course. Hassan is pushing legislation that would require all students to take such a course before graduating.

In Minnesota, communities of color consistently lag behind the majority white population in income, employment, home ownership and other measures of wealth. There are probably many reasons for this, but Hassan and others believe that educating students about financial literacy can help start to change that.

Although there is no mandate, many schools in Minnesota offer personal finance training. But unlike English, science, math and social studies, there are no standards as to what should be taught.

Some schools, including Woodbury High School, offer a course as an elective credit.

Greg Waugh enthusiastically teaches the class, which he says is one of the most popular options at Woodbury High School.

“When you have an emergency fund in place, all the other stresses in your life tend to be more minimal,” Waugh told his students. “Everything is just less because you have that money there as a security blanket for you – knowing that if something goes wrong, you have something to lean on.”

Students listen as a teacher speaks to them in class.

Greg Waugh, left, teaches financial literacy to students at Woodbury High School in hopes of teaching them how to avoid the pitfalls of debt.

Judy Griesedieck for MPR News

Waugh said his passion for personal finance education is rooted in his own mistakes. Before becoming a teacher, Waugh was a high-income salesman who spent more than he earned. He ended up divorcing, laying off and going bankrupt.

“I think if students understand at a young age, if they’re just smart with the income they have and the money they have, whether they go to college or not, they can be fine. “, said Waugh. . “They can create wealth and they can be happy and do the things they want in life.”

According to Billy Hensley, president of the National Foundation for Financial Education.

“People are really realizing that our financial landscape is much more complicated,” Hensley said. “You know, we went from a society where the majority of workers had access to pensions and so on. And now we all need to be the CFO of our retirement as well as the CFO of our financial lives.

Break the cycle

Companies have CFOs – CFOs – but most of us are on our own when it comes to managing health care costs, using credit cards, doing taxes, buy a house or a car, plan for retirement and even have enough cash on hand to buy groceries.

John Pelletier, who directs the Champlain College Financial Literacy Center in Vermont, tracks and rates how personal finance skills are taught in high schools across the country.

He applauds Minnesota’s decision to join more than 10 other states that have imposed high school graduation mandates in personal finance. That’s almost twice as many as five years ago, noted Pelletier.

Like Hassan, Pelletier talks about personal finance education in the context of equity and the cycle of poverty.

“And if you want to break that cycle, I think you have to pass that knowledge on to those who I think need it the most,” Pelletier said. “Who are the poorest? And as the data show, minorities tend, on average, to fall into this poor category. And so they have trouble.

Proponents of mandating personal finance education for high school students often point to research done by Montana State University economics professor Carly Urban.

By comparing the statesUrban demonstrated that when adolescents learn personal money management skills, they change their money management behavior for the better.

“So their credit scores are higher after they have to take financial literacy classes in high school,” Urban said. “Plus, they’re less likely to be delinquent on any of their unpaid debts, which again is a good thing. And then, a really interesting finding, in my opinion, is that students who go on to post-secondary education borrow smarter.

Students listen as a teacher speaks to them in class.

Senior Kenna Smutny listens intently during a high school class taught by Greg Waugh. “Savings is a function of discipline, not the money you earn,” Waugh tells them.

Judy Griesedieck for MPR News

“It’s a problem of this era”

Republicans and Democrats increasingly disagree when it comes to imposing financial literacy requirements on high school graduates.

Last month, Florida Governor Ron DeSantis signed a bill mandating personal finance education as a condition of graduation after it was passed unanimously by both houses of the Legislative Assembly. from Florida.

“It’s embarrassing if our high schools and even our colleges don’t realize that personal finances are very important to students,” Minnesota Rep. Sondra Erickson, R-Princeton, said. Although Erickson supports personal finance education, she was one of two Republicans to vote against the bill on the House Education Committee.

“It’s better if we leave it to the locals instead of mandating it,” Erickson said. “I really honor that local control and I think our districts can make that decision. If we leave that to the districts, they could do a better job.

Hodan Hassan countered that without a statewide mandate, many young people will continue to lack critical personal finance skills.

“It’s a matter of social justice. It’s a matter of fairness,” Hassan said. “It’s a problem of this era.”

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