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Mechanisms for Advancing Health Equity

Improving Financial Literacy to Improve Health and Reduce Health Inequities One High School Graduate at a Time

February 6, 2024


Financial capability (financial literacy coupled with access to economic opportunity) has a positive, long-term effect on health. However, many people living in the margins financially are not adequately equipped with financial education and training to make the most of their employment or other financial resources. Over the past decade, states have increasingly adopted legislation requiring students in public schools to pass personal finance courses in order to graduate high school.

Economic stability is deeply connected to individual and community health; indeed, it is identified by the Centers for Disease Control (CDC) as a Social Determinant of Health (SDOH). People who are employed in safe work conditions with a fair wage are less likely to live in poverty and more likely to enjoy good health. Individual productivity, financial security, and good health impacts the entire community, improving the economy and health for all.

Increasingly, research reveals that a critical factor that can lead to and support economic stability is financial literacy. Many people living in the margins financially are not adequately equipped with financial education and training to make the most of their employment or other financial resources. Women generally have lower financial literacy than men and Black and Hispanic people have lower levels of financial capability than white people.

There is a connection between financial capability (financial literacy coupled with access to economic opportunity) and health. Financial capability has a positive, long-term effect on health, regardless of race or ethnicity, gender, income, education, or employment. This is particularly true for mental health, with financial capability serving as a protective factor against high stress, anxiety and depression. Because women and Black and Hispanic people have lower levels of financial literacy, they face inequitable hurdles to good health related to that gap.

Law and policy can play a role in improving financial literacy. Over the last decade, 25 states have adopted legislation requiring that children who matriculate into the K-12 public school system pass a personal finance course to graduate. Other states are less exacting, requiring that courses be offered but not required for graduation or that the required personal finance education be incorporated into a broader course, with limited time spent on personal finance. Alaska, California, Wyoming, and Washington D.C., impose no requirements or standards for financial education in K-12 schools.

States’ understanding of the importance of personal finance education is not waning: In 2023, 47 states considered legislation to add or increase education on personal finance skills in K-12 public schools. Minnesota is a leader in this space, requiring all students entering high school in 2024 or later to pass a personal finance course during grade 10, 11, or 12. To make sure the goal of financial literacy is met, the law requires that a teacher offering the course have a license to teach financial literacy or be a teacher in agricultural education, business, family and consumer science, social studies, or math, and be approved to teach the personal finance courses.

Rhode Island likewise requires a student to demonstrate financial literacy before graduation but offers various avenues for students to do so, including passing a course, completing a project under teacher supervision, or passing an assessment. The Ocean State’s curriculum incorporates the National Standards for Personal Financial Education’s six topics: 1) earning income; 2) spending; 3) saving; 4) investing; 5) managing credit; and 6) managing risk. There are specific goals and outcomes for students at the end of the 4th, 8th, and 12th grades.

Passing a requirement for financial literacy courses should not be contentious as the overwhelming majority of adults support requiring either a semester or year-long personal finance course for graduation. Perhaps Generation Alpha will become the first generation to achieve financial literacy as young adults, setting them up for improved health and reducing health disparities. To determine where your state stands, check out the 2023 National Report Card on State Efforts to Improve Financial Literacy in High Schools.

This post was written by Kathi Hoke, J.D., Director, Network for Public Health Law, Eastern Region.

The Network for Public Health Law provides information and technical assistance on issues related to public health. The legal information and assistance provided in this document do not constitute legal advice or legal representation. For legal advice, readers should consult a lawyer in their state.

Support for the Network is provided by the Robert Wood Johnson Foundation (RWJF). The views expressed in this post do not represent the views of (and should not be attributed to) RWJF.