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Last year, as he campaigned to become Sacramento’s next mayor, state Assemblyman Kevin McCarty proposed legislation that would require students to take a semester of financial literacy courses as a high school graduation requirement.

Many thought it was much needed and long overdue.

AB 2927, which McCarty’s office had been working on for two years with the support of State Superintendent of Education Tony Thurmond, passed in late June 2024 and was soon afterwards signed into law by Gov. Gavin Newsom. It mandates that all schools teaching ninth through 12th grades start offering financial literacy classes by the 2026-27 school year; and, beginning in the 2030-2031 academic year, all students will have to take such a course in order to graduate high school. This will be, says Hector Madueno, the financial education and community development manager for SAFE Credit Union, a “game changer.”

Astoundingly, despite polls showing overwhelming public support for teaching financial literacy skills to school students, prior to the passage of McCarty’s bill California had no statewide requirements around financial literacy courses in the schools. There were no classes on the state curriculum on how to write a check or make and balance a budget. As a result, the infrastructure that does exist around this has largely been developed through the initiatives of a few banks and some forward-looking schools. 

In the Sacramento area, SAFE has long partnered with school districts to teach financial literacy — with a specific emphasis on helping students understand how to spend and borrow responsibly, how to save money, and how to financially plan ahead. It has hired two certified financial counselors, and it is in the process of adding some additional employees in this area. In recent years, the credit union has built up particularly strong relationships with three high schools — Rio Linda, Mesa Verde and Cordova — and even opened a physical branch, largely staffed by students enrolled in the financial literacy courses, in which teachers and students can do their banking. “We’ve had numerous students go through the program,” Madueno, who has worked in banking for more than 15 years, explains. “It’s a unique and great experience.” 

Now, with financial literacy poised to become a core graduating requirement, the credit union is “hoping to expand it in the years to come in other high schools. This is a strong priority for SAFE Credit Union. To me, the most satisfying job is providing education. I’ve seen the impact of the lack of financial literacy. We can definitely make a difference,” Madueno says.

SAFE’s program, run in partnership with the Sacramento County Department of Education and taught not only in high schools but also in juvenile detention facilities and probation offices, includes a three-hour long “budget sense” simulation based on local rent and food prices, the cost of daycare, expenses associated with maintaining a road-worthy car, and so on. “It’s not as simple as just assigning a course and course work,” Madueno explains. “When it comes to financial literacy, a big part of it is behavior. We let them (students) live through some of the experiences.”

Mayor McCarty did not return calls for this article, but the intent of the legislation that he authored is clear enough. It is aimed at shifting the spending and saving patterns of teenagers in California to give them better tools with which to navigate the financial challenges of adulthood. Indeed, in a news release after the legislation’s passage, McCarty noted that “Taking a finance class in high school can help students make smart money decisions that will benefit them throughout their adult life.”

Because of the importance of this skill set, banks and credit unions in the state have, for years now, been pushing for financial literacy courses to be taught in California’s schools.

“At the bank, we look at financial literacy as important, because it teaches kids coming out to have practical experiences managing their finances: learning to use a checkbook, to balance books,” says Pat Lewis, chief operating officer for the Sacramento-area River City Bank.

“As a banker, yeah, I want to see kids coming out of high school understanding what it is to have income and what expenses are. Too many people don’t understand the concept of debt — and then they get in trouble. I don’t see how there’s a downside to being more financially literate.”

Like SAFE, River City Bank has gotten a head start on the issue, running a Junior Achievement program that brings financial literacy classes into local Title 1 schools, a federal program that provides financial support to schools with a high number of low-income students. Some classes are tailored to children as young as kindergarteners.

Lewis herself — who remembers learning about savings and compound interest as a young child, when her parents gave her nickels and dimes in payment for her doing chores — has taught third graders basic math around the concept of savings, using candy and snacks in lieu of more abstract dollar bills and electronic financial transactions.

Most of the courses, however, are focused on older children. In early 2025, the bank plans to send instructors into three schools to teach these skills. “It’s really at the high school level that they start understanding the concept of money,” Lewis explains. “Because they’re spending money.”

Lewis’s son, Joshua, a 17-year-old senior at Christian Brothers High School, agrees. His school already offers an elective semester-long financial literacy course, which Joshua took this past fall. In the three classes per week, he learned everything from how to craft a realistic monthly budget based around average regional earnings and expenditure needs, and also how to choose stocks to invest in and how to set up foundations. Using Monopoly money, the 25 students in Joshua’s class “bought” stocks and followed the stock market to see how much they would have gained or lost on their investments over the duration of the course. Joshua chose to invest his imaginary $50,000 in Chipotle, Lululemon, Microsoft, Nvidia and JP Morgan.

Joshua’s teacher, Courtney Hendry — who mainly teaches math classes at the school — runs her classes with maximum flexibility; beyond the basics, she tailors the financial literacy exercises to issues her students are interested in, which often involves how to use money to make money. 

“It’s not organized in any typical classroom approach,” Hendry says. “No matter what, being a math teacher it’s very important to teach the basic math curriculum; but I honestly think we have to prepare these adolescents for how to make money and to spend it wisely. That’s my purpose in the class.” She also takes the time to explain to her students why, in addition to earning, spending and saving their own money, part of the purpose of money is to “take care of others too,” and so she explains how to donate to charity, how to engage in volunteer work and so on.

Hendry has learned over the years that she has taught the course that some of her students, growing up in an “immediate culture; we want things now,” have never before discussed money management. Some have parents who are in debt and embarrassed of that fact, and those parents hope against hope the kids will somehow magically learn to manage their finances better than they themselves have done. But, says Hendry, that doesn’t happen of its own accord; instead, it happens through discussions such as the ones she facilitates in her classroom.

“Work with the money you make,” she tells her students. “Don’t live a lifestyle of what you want to make. That’s when people get into trouble and go into debt.”

“I found it very useful,” Joshua Lewis says. “I had friends at my school who did not take the class, and now they regret it. I learned a lot, and going forward I’ll start assimilating things I learned into my life.”

Fellow-student Gabriella Palamidessi, an honors student and school lacrosse player, agrees with Joshua’s analysis. She is applying to universities in California and in Oregon and, following her participation in the class, hopes to study business management. She discusses how the financial literacy class taught her how to fill out tax forms, how to understand stock market fluctuations and how to calculate compound interest. As a result, she says, she became more aware of the importance of making sound financial decisions as a young adult — and of how the benefits of those decisions accumulate over the decades. She also came to understand the world of small business — her father works in real estate — better than she had previously.

Before she took the class, Gabriella admits, “I was just spending a lot of my money.” She pauses and laughs. “My mom’s money, really.” She continues: “It just taught me to save. Because you never know when you’ll hit a roadblock and have no money. It taught me how to invest in my future. I really just learned a lot from this class; the importance of investments and savings. It’s better to start earlier than later.”

Gabriella’s mom, Tish, who has a state job working in communications, recalls in amazement how her daughter would come home from school after these classes and engage in animated discussion with her parents about compound interest. 

“I think it’s so important that we had to have legislation to make this something that happens for our kids,” Tish says. “It got her (Gabriella) more involved in dinner conversations. It’s life skills she’s going to use every day as an adult.”

With the passage of AB 2927, Pat Lewis says, “More folks will have to get into gear and teach financial literacy curriculum.” And that, she believes, is an unmitigatedly good thing. “I don’t see,” the banker says, “how there’s a downside to being more financially literate.”

Hendry couldn’t agree more. The two years that she has taught the financial literacy class at Christian Brothers have made her realize just how important this subject is. “It’s not my typical geometry class setting — there’s a lot more dynamism, because it’s real,” she says. “Adulting is not always as fun as you think. It is a lot of responsibilities.” 

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