Anybody that knows me has heard my rants about the lack of financial literacy education in the California schools. I blogged last year how California received an “F” in a 2023 national “report card” from the Center for Financial Literacy at Champlain College in Vermont.
Back in 2016, I worked with California State Assemblymember Matt Dababneh Co-Author AB-2546, that would have added financial education to the state history-social science curriculum. A watered-down version of the bill passed the State Senate and Assembly and was signed into law by Governor Jerry Brown. There were no teeth in the final version of the law, and no motivation for the school system to implement. There was actually pushback from the education system on prioritizing financial literacy.
There have been many failed bills that tried to move forward with the financial education, but finally on June 29, 2024 AB-2927 was signed off by Governor Newsom. It actually took the support and effort of State Superintendent of Public Instruction Tony Thurmond to finally move the financial literacy bill forward. He understood Financial literacy is linked to positive outcomes, like wealth accumulation, stock market participation, effective retirement planning, and avoiding high-cost alternative financial services. Conversely, poor financial literacy and negative financial behaviors often go hand in hand. Managing household finances and building financial stability are essential life skills.
The bill will require local educational agencies to offer a stand-alone, one-semester course in personal finance at every high school starting in the 2027–28 school year. Then added to the graduation requirements commencing with pupils graduating in the 2030–31 school year.
Per the law the history-social science curriculum framework will include the following:
(a) Age-appropriate information for grade spans, as listed in paragraphs (1) to (3), inclusive, of subdivision (b), on financial literacy that includes, but is not limited to, all of the following:
(1) Fundamentals of banking for personal use, including, but not limited to, savings and checking and managing to minimize fees.
(2) Principles of budgeting for independent living.
(3) Employment and understanding factors that affect net income, including the topics described in subdivision (a) of Section 49110.5.
(4) Uses and effects of credit, including managing credit scores and the relation of debt and interest to credit.
(5) Uses and costs of loans, including student loans, as well as policies that provide student loan forgiveness.
(6) Types and costs of insurance, including home, auto, health, and life insurance.
(7) Impacts of the tax system, including its impact on personal income, the process to file taxes, and how to read tax forms and pay stubs.
(8) Principles of investing and building wealth, including investment alternatives to build financial security, including tax-advantaged investments such as pensions and 401(k) plans, individual retirement accounts (IRAs), and stocks, bonds, mutual funds, and index funds.
(9) Enhancing consumer protection skills by raising awareness of common scams and frauds and preventing identity theft.
(10) Identifying means to finance college, workforce education, low-cost community college options, and other career technical educational pathways or apprenticeships. Financing options covered may include scholarships, merit aid, and student loans.
(11) Understanding how psychology can impact one’s financial well-being.
(12) Charitable giving.
(13) Other topics that are directly and specifically relevant to personal finance.
(b) Age-appropriate content related to the topics listed in paragraphs (1) to (13), inclusive, of subdivision (a), at least twice in each of the following grade spans:
(1) Kindergarten and grades 1 to 5, inclusive.
(2) Grades 6 to 8, inclusive.
(3) Grades 9 to 12, inclusive.
My fingers will remained crossed that this law gets fully implemented, and not pushed aside like AB-1546 did.
If you are in the Los Angeles area, and have any questions or real estate sales or financing needs, feel free to contact me
Ron Henderson GRI, SRES, SFR, RECS, CIAS, CREN, GREEN
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
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www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
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