May 28, 2020

The Simple Math of Finance Education: A $36 return for every $1 invested

This research report released in April, Financial education affects financial knowledge and downstream behaviors, clearly demonstrates what educators already knew: financial education works. Yet, as we see from our updated analysis only about 1 in 5 students attends a high school that ensures students cross that graduation stage having taken a one semester personal finance course. 

So, how do we bridge this gap between the promise of financial education and the reality?

What is that simple compelling argument that policymakers can understand?  Don't you want to include/keep a course in high school curriculum that provides academic benefits and has an ROI (return on investment) of $36 for every dollar invested. 

The simple math is that it costs about $10,000 for a personal finance teacher to teach a one semester class of 24 students. If only 1/4 of students achieve a level of proficiency in the course (similar to math) and derive $3,000 in annual value from the course over a 30 year period, that equates to $60,000+ in value created per student in 2020 dollars. So that class of 6 proficient students creates $360,000 in value from an initial $10,000 investment. The value created by a personal finance course accrues to individuals instead of the financial services industry meaning household finances are stronger with spillover effects in local and state economies.

I think these assumptions are conservative too. I expect that a hands-on, relevant and engaging personal finance curriculum would lead to higher levels of proficiency. That would lead to a much higher percentage of students receiving both academic and some financial benefits from a course led by a confident and highly qualified teacher. 

So, as districts sharpen their pencils in developing budgets for the next school year, let them know that not only is finance education essential in the post-pandemic economic recovery, it also has an incredible return on investment. 


Cost of course = teacher + curriculum + teacher PD = $10,000 + $0 = $10,000

Value of course = 24 students X .25 proficient [comparable to math proficiency levels in 12th graders] = 6 students proficient

Value of course for each proficient student = $3,000 per year

  • Value from managing credit score which reduces borrowing costs and insurance premiums, increase of 1% in savings rate, elimination of overdraft fees, and choosing lower-cost investment options
  • Does not include value derived from more informed decisions that students make about post-secondary education and investing

Value of course over 30 years (discounted at 3% per year) in 2020 dollars = $60,565

Additional details:

  • NGPF provides curriculum to more than 30,000 educators and 2 million students at no cost; 5,000 educators have participated in more than 60,000 hours of PD in the last 12 months at no cost too!
  • Teacher cost: $10,000 per class [fully loaded cost with salary and benefits of $100,000 allocated across 10 classes]
  • Assumes 24 students per class

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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