Celebrate financial literacy by making it a graduation requirement

New Mexicans have an opportunity to improve the financial literacy of the next generation by making it a graduation requirement in all 89 of our local school districts.

As of April 2024, 25 states have added a stand­alone course in financial literacy to their high school graduation requirements, reaching 53% of students nationwide, according to the national nonprofit Next­Gen Personal Finance. By contrast, in New Mexico, financial literacy is offered as an optional elective, and only about 11% of New Mexico students choose to take the class. New Mexi­co ranks 49th in the nation for overall financial litera­cy according to the online personal finance website WalletHub.

During the 2024 legis­lative session, Think New Mexico partnered with a diverse and extensive co­alition of organizations to urge legislators to add a financial literacy course to New Mexico’s high school graduation requirements. Members of this coalition included elected officials like State Treasurer Lau­ra Montoya and Nava­jo Nation Vice President Richelle Montoya as well as bankers, credit unions, chambers of commerce and other business groups, higher education institu­tions, civic organizations, and anti-poverty groups. Unfortunately, the pro­posal to add a standalone financial literacy course to the graduation require­ments ultimately failed to pass the legislature on a close vote.

However, the legislation that was enacted to revise the state’s high school graduation requirements included another opportu­nity to increase access to financial literacy educa­tion. Of the 24 credits that high school students must complete, two credits will now be designated by each school district at the local level. This means that ev­ery New Mexico school district can adopt financial literacy as one of those lo­cal credits.

When students increase their financial literacy, studies have found that they shift from high-cost to low-cost sources of credit and student loans, and are 21% less likely to carry a balance on a credit card. The New Mexico Legis­lative Finance Committee reported that after financial education was mandated in the states of Georgia, Idaho and Texas, students who participated in the programs had higher credit scores and higher savings rates.

Completing a class in personal finance is particu­larly important for students from low-income families, which research indicates have far less access to fi­nancial literacy courses than do their wealthier peers. When high school students learn personal finance, they often bring those lessons home to their parents and grandparents, benefitting the whole fam­ily.

A 2022 poll of 751 likely New Mexico voters found that 84% believe it is very important for students to be taught about personal finance topics. Similar­ly, a recent national poll found that 80% of U.S. adults wish they had been required to complete a personal finance course in high school.

School districts that adopt this requirement will benefit from access to free materials and trainings. NextGen Personal Finance offers free curriculum and professional development for financial literacy teach­ers, and even offers sti­pends for teachers to com­plete the training if their districts make financial lit­eracy a graduation require­ment. Many of New Mexi­co’s local credit unions and nonprofits like JumpStart also provide support for fi­nancial literacy education.

We encourage readers to reach out to your local school board members and urge them to make a stand­alone course in financial literacy one of their local­ly designated high school graduation requirements. More information can be found on our website at www.thinknewmexico. org.

(EDITOR’S NOTE: Fred Nathan is executive director of the nonparti­san, results-oriented think tank Think New Mexico.)