Lieu Legislation To Promote Financial Literacy Education

(Sacramento, CA) – Assembly Member Ted Lieu, (D-Torrance), today introduced AB 1950 which enables school districts to provide personal financial education to 7^th through 12^th graders.  More specifically, this bill encourages that students be taught consumer economics, budgeting, savings, credit management and identity theft prevention.

“Finances are becoming more and more complicated, especially with the advent of identity theft,” said Assemblymember Lieu. “We teach our children how to read and write, but rarely emphasize the importance of financial literacy. This is a national concern because we are letting our children engage in finances that they don’t understand. On average, by the time a student becomes a freshman in college they have three credit cards and have accumulated debt of $3,000.”

Today, more teenagers are receiving ATM and credit cards without any education on money management. The current economic trend among youth and adults is that they are spending far more than they are saving. AB 1950 will encourage all school districts to offer instructions on the financial consequences of misuse of credit, developing good budget practices, creating solid financial and savings plans, protecting their assets, and fully comprehending the cost of borrowing. AB 1950 will also help educate students of the threat of identity theft.

“A poorly educated youth can potentially create a disastrous situation,” said Lieu. “Poor financial decisions made by our youth today can negatively impact their ability to finance their higher education, purchase a house, and can even affect their retirement.”

States like Delaware have successfully developed several school curriculums that provide children K-12 with a fundamental understanding of personal financial responsibility. Curriculums have included students engaging in basic banking activity, learning about homeownership, day-to-day budgeting, and retirement planning.

AB 1950 will be heard before the California State Assembly Committee on Education in the next few months