SAN DIEGO — More real-life education is coming to the California classroom.
A personal finance course is being added to the list of high school requirements.
Local lawmakers say the new legislation will allow young people to learn how to save for the future, invest and spend wisely.
"That's good news, I don't know about you, but I could have used a financial literacy class in school," Dan Roccato said who is a Clinical Professor of Finance at the University of San Diego.
That's relatable for so many. Money can be easy to spend and hard to save.
"The number one stressor, consistently according to surveys, is money,” Roccato added. “The number three reason for divorce is money, so if we can fix a little bit of that, then it's a good thing."
California lawmakers partnered with the non-profit Next Gen Personal Finance to get Assembly Bill 2927 into law. It now makes financial literacy a high school graduation requirement.
"Americans are great consumers, we're great at spending,” Roccato said. “But on the other end, a new study shows 66 percent of Americans are financially illiterate and can't answer basic questions about money management. 71 percent say money causes them anxiety and 22 percent couldn't pay all of their bills last month.”
Roccato added, “So there's a big need for more education in this country, so we have better outcomes.”
The personal finance class will begin at the start of the 2027 school year, making one semester mandatory for the graduating class of 2031.
Matt Hayes is with the San Diego County Office of Education. He is set to help write the curriculum.
"To start adulthood with those skills, it will benefit them tremendously," he said.
Hayes added, "Anything from budgeting to credit, to how banks work, how to finance college, topics that relate to how people make financial decisions.”
The new course comes as a WalletHub survey shows Gen Z, those born between 1997 and 2012 are the least financially confident generation.
Roccato says the class should cover three core principles: budgeting, saving and using credit.
"It means better loans, higher pay, saving on taxes, the healthier the consumer we have, the healthier the economy we're going to get. No question," he said.
He adds, "The evidence is clear, we need help when it comes to understanding basic money concepts better. We have jobs, we're making money, but we're not necessarily handling that paycheck the best way we know how.”
He says this new legislation will help young people prepare for their financial future earlier than ever.
"One of my favorite sayings is right-size your life. What I mean by that, is you want to fit your lifestyle, into your income," Roccato said.
California is the 26th state to pass a requirement like this.
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