Teaching Illinois students to be smart with money can cut poverty
Minnesota and Utah have taken practical approaches to financial literacy education that have measurably improved students’ understanding in both states. Illinois should do more to teach students how to manage their money.
Financial literacy plays a key role in combating poverty, but Illinois’ public schools lag states such as Utah, which pioneered financial literacy education, and Minnesota, which now leads the nation in financial literacy.
A growing body of research finds the more people know about managing their money, the less likely they are to fall into poverty. One study, assessing 113 countries, discovered financial literacy significantly reduced the likelihood of falling into poverty, regardless of country, income, demographics or region. Others found financial literacy gives people more options and reduces poverty.
The American Public Education Foundation’s Nation’s Report Card on financial literacy annually ranks every state on financial literacy education, arguing that “our nation is rapidly sinking into a sea of debt and financial dependency. And the crisis is growing.” Financial illiteracy contributes to accumulation of excessive debt, inadequate savings or misuse of credit cards, resulting in increased bankruptcy filings, overdependence on government or unpreparedness for retirement.
According to the report card, Illinois has room for improvement. With a grade of B, it ranks better than most states but falls short of what Illinois needs to maximize opportunity for its citizens, behind 11 states receiving grades of A.
Financial illiteracy imposes significant costs on Illinoisans. According to a 2021 survey of Illinois residents, 25% said they lost at least $1,000 that year because they “lacked knowledge about personal finances,” such as by making an expensive purchase without budgeting or taking on debt they could not pay off. The percentage of respondents saying they lost at least $10,000 was 7%.
Many Illinoisans are burdened by heavy debt, with the fifth-highest household credit card debt in the country at almost $11,000. Illinois has a slightly higher average personal credit score than the nation, but some large Illinois cities such as Chicago, Springfield and Peoria are well below the personal national average.
Two promising financial literacy models for Illinois to emulate are Utah and Minnesota. Utah, which also leads the nation in social mobility and welfare reform, became the first state to pioneer financial literacy education, which has measurably improved in the state. Minnesota more recently adopted the model and is now the most financially literate state in the nation.
WalletHub’s 2025 financial literacy rankings, which analyzed credit scores, the percentage of adults with rainy-day funds and other metrics of financial literacy, found Minnesota the top and Utah the 13th most financially literate states while Illinois was 32nd. Illinois also trails every state in the Midwest except for South Dakota, with four Midwestern states in the top 10.
In 2003, Utah became the first state in the country to mandate a financial literacy class for graduation from Utah public high schools. In 2004, the Utah State Board of Education approved “General Financial Literacy,” a one-semester course required for the 2008 graduating class and beyond.
Key concepts of general financial literacy are taught throughout Utah’s K-12 system, culminating in the literacy course in students’ junior or senior years. The course covers the five “strands” of financial literacy:
- Basic economic concepts critical to making wise personal financial choices.
- Factors influencing personal financial priorities and rational decision making.
- Sources of income and the relationship between career preparation and lifetime earnings.
- Saving methods and investment strategies.
- Principles of personal money management including budgeting and credit.
Through the course, Utah high school students learn about the importance of budgeting and saving, individual responsibility, investment strategies, how to responsibly manage credit and debt, and the role of rational individual behavior in shaping the larger economy.
A 2018 performance review conducted by the state auditor and treasurer found “Utah students who have completed the graduation requirement have better personal financial knowledge and make better behavioral choices than those who have not.”
Utah is even teaching students about investing, a cornerstone of financial literacy and key to building long-term wealth. In 2023, the Utah state treasurer announced a statewide investment challenge for students in grades 4-12. In a 10-week simulation of investing on Wall Street, “teams of 3-5 students invest a hypothetical $100,000 in common stocks and diversified investment funds traded on major exchanges,” competing for recognition as the top teams.
Minnesota followed Utah’s lead, becoming the 20th state to require a personal finance course for all high school graduates in 2023. Minnesota now tops state financial literacy rankings.
Illinois lawmakers began addressing the financial literacy crisis in 2021, passing a bill stating that “beginning with pupils entering the 9th grade in the 2021-2022 school year” one semester “may” include a financial literacy course. Illinois does not require the course.
The General Assembly considered a bill requiring a high school financial literacy course, similar to Utah’s, in the 2023-2024 legislative session. That bill died at the end of the session.
To prepare Illinois’ students for the future and their opportunities, state lawmakers should reconsider such a bill and provide for additional practical instruction. This will especially give low-income students better access to financial knowledge, information crucial to their rise up the income ladder.