Ellie Costas, a 17-year-old San Marcos High Senior, is already using what she learns in high school.
She has learned how to file her taxes for her part-time jobs at a retail store and at Legoland. And the personal finance course she’s taking has convinced her to stop spending all of her income on impulse shopping and dining out and instead set aside money for her college funds.
Her schoolmate Emiliano Damian, 17, learned how to choose a credit card, how to earn credit card reward points, and how to build good credit by paying off your credit card on time.
Another classmate, Ty Turner, 16, learned that as long as he starts saving and investing early for retirement, he can earn a million dollars before he retires on compound interest.
“If you start planning for retirement a lot earlier than everyone else, you get a lot more money than everyone else,” he said.
All of these students say they love their new personal finance course that debuted last fall. Unlike other courses they have taken, it is clear how useful this will be in their daily life.
“You know when you’re studying math or language arts it can sometimes be hard to understand why you’re learning something? This course teaches real things that everyone knows are valuable,” said Emiliano. “I feel like everyone is paying attention for their own sake instead of messing around in class because nobody sees the point in learning geometry.”
Tara Razi is an American history teacher who has been teaching for nine years. She launched San Marcos High’s first personal finance course this school year in the midst of the pandemic to help students avoid the financial mistakes she’s seen other people make, like racking up too much debt.
Razi prides itself on being financially independent. She got her first job at age 14, later worked full-time at Chili while teaching and tutoring students, and has since paid off her car and bought a house at 28.
“I’m really proud of the financial stability that I’ve been able to build in life,” she said, “and I just always felt that this was information that should be shared with the next generation of students.”
“It was like a wake-up call”
Razi is one of a few thousand teachers in California teaching personal finance, a class that class advocates say is vital to helping students avoid poverty and debt, achieve financial freedom, and generally grow up – but not offered in enough schools.
Initially, Razi planned to offer part of the class, perhaps for around 40 students. But the class has become so popular that it now has six sections with 220 students and Razi has had to recruit another teacher to teach them.
During a unit on stocks, Ty said he and his classmates created stock portfolios and competed against each other to see who could make the most money in a month.
During an entrepreneurship unit, Ty worked with a classmate to start a pizza food truck business. Ty called landlords and asked how much they would charge to rent a business space, and he spoke to Bank of America to see how much he could get on a business loan.
After studying clips of Shark Tank in class, the two students pitched their food truck idea to their teacher and the San Marcos Superintendent, both of whom said they would invest in their project if they were venture capitalists.
In Razi’s class, Ty pre-registered to vote, wrote a cover letter and resume, and applied for a job as a barista.
“When little kids talk about how there should be useful classes … that class is that class,” Ty said.
Before taking Razi’s class, Ellie said she wouldn’t save her money. She had previously been told she needed to save, she said, but no one explained why until Razi did.
At one point in class, she went through all of her spending transactions with Razi and realized that she spent her paychecks on “random stuff” and restaurants.
“Having heard what (Razi) had to say, it was like a wake-up call for me,” Ellie said. “I may be 17 but I need to start saving for bigger things in life. If I hadn’t learned that in class, I would have started saving too late or not at all.”
Razi also teaches what she calls “life hacks,” things most of her students haven’t learned because they spend much of their lives with their phones.
She taught them how to address an envelope, write a check, sew on a button, write a thank you note, and sign their names on documents.
“This is going to sound crazy, but they never practiced signing because growing up we would go with our parents and watch them sign. But now the kids are at home or on their phones,” Razi said.
Razi said high schools prepare kids well for college, but they often don’t teach practical life skills like managing money and credit.
“You can be very literally and academically very successful on a college campus, but when you get off that campus you know how to make sure you have enough money in your account to pay your bills,” she asked. “Do you know what to look for when choosing a credit card? Do you know what an interest rate is?”
49th in the nation
Personal finance courses are not widely available in California in part because the state does not require them as a degree course.
Less than 1 percent of California high school students attend a school that requires it, according to Next Generation Personal Finance, a nonprofit in Palo Alto that offers a free financial literacy curriculum and teacher training.
According to the nonprofit, only one in four California high school students attends a school that offers personal finance as an elective. In contrast, 70 percent of high school students nationwide attend a school that offers a personal finance course.
Because of this, Next Generation ranks California 49th among states in personal finance education.
“In conversations with[California]lawmakers, the response is usually, ‘Well, districts can choose to offer this if they want to.’ This is clearly not happening,” said Tim Ranzetta, Founder of Next Generation Personal Finance. “Other states seem to think having an elective is important.”
When Razi started her personal finance class, she said she had to push for it to be a separate class, rather than merging personal finance into another class like economics.
She said district budgetary reasons are also likely to limit personal finance course offerings; Because it’s an elective in California, it’s likely to have less of a priority than the classes the state requires for graduation.
For years, state officials have complained that they do not provide enough personal finance education. Financial literacy topics are part of the state’s core economics curriculum, a one-semester class required by the state for the high school diploma.
In 2013, state legislatures required that financial literacy topics such as budgeting and managing personal loans, student loans, and debt be included in the state’s social sciences curriculum framework. A state law passed in 2016 required that the state’s next overhaul of the social sciences framework, currently planned for 2026, include more financial literacy topics.
The curriculum framework is a set of guidelines, not requirements, that school districts and charter schools must adhere to, said Scott Roark, spokesman for the California Department of Education.
Personal finance advocates say economics education focuses more on high-level monetary policy than personal finance strategies that can be applied in everyday life. Ranzetta said that embedding personal finance in a business course often means it becomes an afterthought that doesn’t get as much time and attention as it needs.
Ellie, who is enrolled in a government/business course, said he taught her how government regulates money and other big issues like inflation, the stock market and the Federal Reserve.
But the class doesn’t talk about money on a personal level.
“They never really address how it’s going to affect us, what personal finance is doing,” Ellie said.
State officials have also opposed the requirement for a personal finance course because they say California emphasizes local control, which means school districts and charter schools have a significant degree of freedom to choose what to teach students.
“Most states will say ‘local control,’ but aren’t we deciding that math is important enough that every school has to teach math for four years?” asked Ranzetta.
California hasn’t shied away from mandating some courses. Last year, the state made folklore a prerequisite for the Abitur.