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Economics And Personal Finance Courses Complements Not Substitutes

Leo Migdal
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economics and personal finance courses complements not substitutes

Managing personal finances is an important life skill that underpins the national effort to require personal finance education in every state. But that effort shouldn’t edge out teaching economics. In 1998, only 14 states required personal finance standards in their schools’ curriculums, according to the “Survey of the States” report. As of 2022, that number had risen to 40, according to the biennial survey by the Council for Economic Education and includes Arkansas, Mississippi and Tennessee. Going a step further, only one state (South Dakota) required that students take a personal finance class in 1998; that number had increased to 23 in 2022. Tennessee, Mississippi and Arkansas require students to take a personal finance course or require personal finance coursework integrated into another class.

For sure, there are benefits for individuals and society when people have learned how to manage their personal finances, such as apply for a car or home loan or handle credit card debt. But there is a potential downside associated with these education requirements as well. With a finite number of hours in a school schedule and many subjects to teach, administrators, teachers and curriculum directors must make sacrifices when they allocate a scarce education resource (classroom time). As a result, it can be tempting for administrators to see economics and personal finance as substitutes for one another. Addresses: School of Education, The Richard Stockton College of New Jersey, 101 Vera King Farris Drive, Galloway, NJ 08205, USA Abstract: Personal finance and economics are two distinct subjects, with some common characteristics, that require instruction by highly qualified teachers.

Both are critical to well-being of households, businesses, and the macro economy. The author discusses the evolving curricular requirements for economics and personal finance content and the importance of including both subjects in grades K-12 education. Keywords: economics education; personal finance education; high school curricula; economic literacy; financial literacy; K-12 education; United States; USA. International Journal of Pluralism and Economics Education, 2012 Vol.3 No.4, pp.354 - 360 Short answer: No. "Economic reasoning can be used to make decisions in all areas of life, but especially when making personal finance decisions.

In fact, personal finance can be viewed as the application of the economic way of thinking to everyday decisions. If anything, economics and personal finance are complements, not substitutes." #EconEdMonth #FinLit Is personal finance instruction a substitute for economics? I don't think so. If anything, economics and personal finance are complements, not substitutes. #TeachEcon #economics Mary Suiter Lily Levin

We investigate this question empirically, and find that their relationship is complicated. Personal finance does seem to take instructional time away from economics which hurts economics scores. But personal finance testing can motivate students to learn basic economic reasoning which increases econ scores, especially for students with low SATs. Read more here: https://www.richmondfed.org/publications/research/working_papers/2022/wp_22-03

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